Barclays: The Federal Reserve is expected to stand pat this week and may cut rates later in 2026.

Barclays analysts stated in a report that, in the case of high inflation, it is expected that the Federal Reserve will maintain the federal funds target rate range at this week's meeting, but it is still possible for them to cut rates later this year. They said, "In a situation of increasing uncertainty, the Federal Reserve's stance is to maintain a wait-and-see approach, as demand remains resilient and inflation remains high, supporting their patience, while policymakers also suggest a decrease in confidence in further rate cuts in the near future." They stated that if inflation cools as expected, they still expect the Federal Reserve to have enough confidence to begin easing policy by September. They said, "We still expect rate cuts this year." According to data from the London Stock Exchange Group, the money market reflects expectations of a 10 basis point rate cut by the Federal Reserve in 2026.