Barclays Shifts Hawkish on US Rate Hikes, Sees Two Increases in 2026

Barclays has changed its outlook on the US Federal Reserve's interest rate decisions. The brokerage now expects the Fed to raise rates by 25 basis points in September and again in December, reversing its earlier view that rates would remain unchanged for the rest of the year.

This shift follows recent remarks from Fed Chair Kevin Warsh, who strengthened expectations of further monetary tightening at the Federal Reserve's Jackson Hole symposium. Warsh indicated that policymakers remain concerned about inflation and could consider additional rate increases if price pressures fail to move convincingly toward the central bank's 2% target.

Barclays described Warsh's latest speech as notably hawkish, providing an implicit argument for further monetary tightening. The brokerage had previously expected the Fed to leave interest rates unchanged through the remainder of the year.