Barclays Sees Two More Fed Rate Hikes Following Warsh's Hawkish Remarks
Barclays has revised its interest rate forecast for the US Federal Reserve following recent remarks from Chair Kevin Warsh. The brokerage now expects two more rate hikes this year, in September and December.
Warsh's speech at the Jackson Hole symposium on Friday was described as 'notably hawkish' by Barclays. He emphasized that inflation is too high and financial conditions are not restrictive enough to achieve full employment.
The brokerage notes that although it still expects monthly inflation readings to come in softer than longer-horizon measures, 'unfavorable base effects will work against progress by those metrics through year-end.'
Markets have already priced in a 60.4% chance of a rate hike in September, according to the CME Group's FedWatch tool.