Barclays delays expectations for the next Fed rate cut to September.

Barclays economists have adjusted their prediction for the timing of the next rate cut by the Federal Reserve, now expecting the Fed to cut rates in September rather than June. The Barclays team wrote in a report on Friday, "This adjustment mainly reflects our upward revision to the outlook for PCE inflation, as well as increased inflation risks from the conflict in Iran." Barclays currently predicts that the Fed will cut rates by 25 basis points to 3.25%-3.50% at the September meeting of the Federal Open Market Committee, followed by another 25 basis point cut in March 2027. The Barclays team stated, "If inflation pressures persist longer than expected, we expect the FOMC to further delay rate cuts. Conversely, if the unemployment rate suddenly rises - for example, due to a sharp increase in energy prices and its negative impact on economic activity - we expect the FOMC to cut rates faster and more aggressively."