British Giant Barclays Updated Its FED Interest Rate Forecast After Yesterday's Decision and Provided a Date for Interest Rate Cuts!

In the U.S., the inflation data for February announced yesterday came in below expectations. Following the CPI data, expectations regarding the possibility of FED cutting interest rates reshaped, while Barclays revised its forecast.

The Fed Will Make Two Interest Rate Cuts, Then Start Again in March 2026!

According to Reuters, Barclays indicated that despite tariff uncertainty, labor market conditions continued to soften, doubling its expectation for a Fed rate cut in 2025.

Barclays analysts expect the Fed to make two 25 basis point rate cuts in June and September 2025.

The bank had previously projected a 25 basis point cut in June.

‘Despite a weaker labor market and high inflation, it is causing us to make another interest rate cut.’

Barclays analysts recently added that they expect the Fed to take a long break from interest rate cuts after this year’s September interest rate cut and anticipate that the interest rate cutting cycle will resume in March 2026.

No Interest Rate Cut This Year!

Following yesterday’s inflation data, Barclays doubled its 2025 interest rate cut expectation, while the data did not impress Nomura economists.

According to Nomura economists, FED is not expected to cut interest rates this year.

Nomura analysts noted that despite the data coming in below expectations yesterday, components with a higher weighting in core personal consumption expenditures (PCE) inflation, such as consumer price index (CPI), came in stronger than expected.

Economists expecting the upward trend in PCE to continue, indicate that this situation will lead to a more hawkish stance in the Fed’s monetary policy and will cause it not to cut interest rates.

When is the FED Meeting?

The FED will announce its interest rate decision in March on Wednesday, March 19th. The expectation is for interest rates to be kept unchanged.