Barclays abandons expectations of a rate cut by the Federal Reserve in 2026 and anticipates one rate cut in 2027.

Barclays economists have adjusted their Federal Reserve policy forecast to only one interest rate cut by the end of next year, in March 2027, based on their expectation that energy prices will remain high. Previously, they predicted that the Fed would cut interest rates by 25 basis points in September 2026 and March 2027. Marc Giannoni and Jonathan Millar stated in a report: "Due to the conflict in Iran, energy prices are expected to remain high throughout 2027, so we have raised the trajectory of core inflation and slightly lowered growth forecasts," and "no longer believe that the Federal Open Market Committee will be able to cut interest rates this year."