Barclays Sees Two More Rate Hikes Following Hawkish Warsh Speech

Barclays is now predicting two more interest rate hikes this year after Federal Reserve Chair Kevin Warsh's latest speech at the Jackson Hole symposium.

In a notably hawkish tone, Warsh signaled that further rate hikes may be needed to bring inflation back in line with the central bank's 2% target.

Warsh stated that policymakers would 'have work to do' if they lacked confidence that inflation was returning to the target level. He also emphasized that inflation is too high and financial conditions are not restrictive, while the labor market is consistent with full employment.

Barclays had previously expected the Fed to keep rates unchanged through the remainder of the year, but now expects a 25 basis point hike in September followed by another in December.