Barclays Sees Two Rate Hikes Ahead After Warsh's 'Work To Do' Warning

Barclays has revised its forecast for Federal Reserve interest rate hikes in 2026. The brokerage now predicts two 25-basis-point increases, one in September and another in December, after Fed Chair Kevin Warsh's statement at the Jackson Hole summit.

Warsh warned that policymakers still have 'work to do' to bring inflation back to its 2% target, which has been met with a 61.9% probability of a rate hike next month according to the CME FedWatch tool.

The PCE Index, the Fed's preferred inflation gauge, rose 3.7% from a year earlier in July, well above the central bank's target.