Barclays sees two more Fed rate hikes this year after Warsh speech

Live updates

1. 14d ago

   Barclays expects two more Fed rate hikes this year

   Barclays now expects the Federal Reserve to raise interest rates by 25 basis points in September and December, reversing its previous outlook of holding rates steady through year-end. Markets currently price a 60.4% chance of a September hike. The shift follows Federal Reserve Chairman Kevin Warsh's hawkish signals that the fight against inflation is not over.

   Why it matters

   The Federal Reserve's interest rate decisions impact borrowing costs, economic growth, and inflation. Chairman Warsh's recent speech has influenced market expectations, contributing to a decline in gold prices and a shift in investor views. The Fed's actions have far-reaching implications for the US economy and global markets.

   What is confirmed

   • Barclays expects the Federal Reserve to raise interest rates by 25 basis points in September and December.
   • Markets currently price a 60.4% chance of a September rate hike.
   • Chairman Warsh's speech signaled that the fight against inflation is not over.

   What to watch next

   • Federal Reserve interest rate decisions in September and December
   • Chairman Warsh's future speeches and policy statements
   • US inflation data releases
   Sources used for this update (5)

   1. WSJ — Warsh Makes the Case for Higher Rates and Raises the Bar for Standing Pat
   2. Financial Times — Warsh clears up his own mess, but US credibility is still stretched
   3. Bloomberg.com — Warsh’s Pledge on Stable Prices Will Soon Be Tested
   4. financialpost.com — Global bond selloff sends yields to the highest level since 2008
   5. cryptonews.net — Bitcoin price rises, but why is $80K proving so hard to break?
   confidence 90%
2. 15d ago

   Barclays forecasts two Fed rate hikes after Kevin Warsh speech

   Barclays now expects the Federal Reserve to raise interest rates by 25 basis points in September and December following a hawkish speech by Chairman Kevin Warsh. This represents a sharp reversal from the bank's previous outlook of holding rates steady through year-end. Markets currently price a 60.4% chance of a September hike, though some investors remain unconvinced. The shift follows Warsh's signals that the fight against inflation is not over, causing JPMorgan traders to drop bullish stock views and contributing to a two-week low for gold prices.

   Why it matters

   Chairman Kevin Warsh's remarks at Jackson Hole have increased the likelihood of monetary tightening. This creates potential tension between the Federal Reserve and the Treasury. Investors are weighing these hawkish signals against broader economic forces and geopolitical instability.

   What is confirmed

   • Barclays predicts the Federal Reserve will raise interest rates in September and December.
   • Kevin Warsh delivered a speech at Jackson Hole signaling that the inflation fight is not over.
   • Markets price a 60.4% chance of a rate hike in September.

   Still unconfirmed

   • Warsh's speech may put the Fed at odds with the Treasury.

   What to watch next

   • Federal Reserve interest rate decision in September
   • Upcoming payrolls data reports
   • Further communication from Chairman Kevin Warsh regarding inflation targets
   Sources used for this update (18)

   1. The Washington Post — The Fed confronts a powerful new economic force
   2. NBC News — How Fed Chairman Kevin Warsh course corrected after a ‘confusing’ debut
   3. The New York Times — Warsh, After Talking Tough on Inflation, Faces a ‘No-Win Situation’ on Rates
   4. Bloomberg.com — Bond Investors Wary After Warsh Fans Wagers Fed Poised to Hike
   5. CNBC — Jackson Hole analyst roundup: Warsh's speech sends hike chances higher, may put Fed `at odds' with Treasury
   6. Reuters — Barclays sees two more Fed rate hikes this year after Warsh speech
   7. CNBC — Treasury yields tick lower as U.S.-Iran war moves back into the spotlight
   8. WSJ — U.S. Stock Futures Little Changed as Markets Weigh Warsh’s Hawkish Remarks
   9. Bloomberg.com — Warsh Takes a Page From Aerospace Pioneers to Find the Right Stuff
   10. Forbes — Forbes Daily: Warsh Calls For A “Quieter” Fed in Jackson Hole Speech
   11. CNBC — Markets see Warsh endorsing a rate hike in September. Not everyone is convinced
   12. Bloomberg.com — JPMorgan Traders Drop Bullish View on Stocks After Warsh Speech
   confidence 90%