Barclays Sees Two More Rate Hikes After Warsh's Hawkish Speech

Barclays, a Wall Street brokerage, is now expecting two more interest rate hikes from the U.S. Federal Reserve this year.

This prediction comes after Fed Chair Kevin Warsh's recent speech at the Jackson Hole symposium, where he stated that policymakers would 'have work to do' if they lacked confidence that inflation was returning to the central bank's 2% target.

Warsh emphasized the importance of price stability and noted that inflation is currently too high, financial conditions are not restrictive, and the labor market is consistent with full employment.

Barclays believes Warsh's speech was 'notably hawkish' and implies a need for further tightening despite his opposition to providing explicit forward guidance.

The brokerage previously expected no rate hikes through the remainder of the year but now forecasts 25 basis point increases in September and December.