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Barclays Expects 2 Rate Cuts by Fed Next Yr
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In the face of downside risks of employment, the Fed cut rates by 25 bps overnight as expected. Barclays Bank responded by saying that the Fed hinted at pausing rate cuts in January 2026. The Fed's Summary of Economic Projections (SEP) forecasted one rate cut each in 2026 and 2027, with only slight revisions to inflation and unemployment rate projections. Barclays anticipated two rate cuts by the Fed next year, occurring in March and June, aligning with Fed Chair Jerome Powell's 'dovish' comments. The Fed's statement was largely in line with expectations, Barclays added. The statement removed the reference to the unemployment rate having 'remained low'. There were internal disagreement within the Fed, with three members opposing the 25 bps rate cut. Of which, two FOMC members believe rates should remain unchanged, while one advocates for a substantial 0.5% rate cut. AASTOCKS Financial News Website: www.aastocks.com |
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