Barclays ditches 2026 Fed cuts
- Barclays dropped its last expected 2026 Fed cut on May 4, saying the Federal Reserve will now stay on hold through 2026. - The bank had penciled in a September 2026 cut before shifting to one 25-basis-point move in March 2027 as oil-driven inflation lingers. - That puts Barclays with a growing hawkish camp as markets and economists rethink how long “higher for longer” really lasts.
Barclays just made a very simple call — stop waiting for the Fed to rescue borrowers in 2026. The bank now thinks the Federal Reserve will leave rates unchanged for the rest of this year, all through next year, and then finally cut once in March 2027. That is a meaningful shift because rate forecasts are really inflation forecasts in disguise. And right now the inflation problem Barclays cares about is energy. (finance.yahoo.com) ### What changed? The specific change is narrow but important. Barclays had been expecting a 25-basis-point cut in September 2026. On May 4, it scrapped that call and kept only one quarter-point cut in March 2027. In plain English — one expected cut disappeared from the calendar, and the first easing move got pushed back about six months. (money.usnews.com) ### Why does oil matter so much? Because energy is one of the fastest ways a geopolitical shock turns into sticky inflation. Higher oil prices raise gasoline and diesel costs directly, but they also seep into shipping, air travel, manufacturing, food di(money.usnews.com) more about inflation getting stuck above target again. (msn.com) ### Why is this a Fed story, not just a Barclays story? Because the Fed already looks uneasy. At its late-April meeting, the central bank held rates at 3.50% to 3.75%, and the vote was unusually split — the most divided decision since 1992. That matters because a fractured Fe(msn.com)harder to dismiss. (msn.com) ### Is Barclays out on its own? Not really. The bigger story is that Barclays is joining a growing camp of forecasters who no longer expect any Fed cuts in 2026. Reuters’ roundup on the call framed it as part of a broader pullback from earlier expectations that the Fed would keep easing (msn.com)ing. (money.usnews.com) ### What does “no cuts in 2026” actually mean? It means borrowing costs stay high for longer across the economy. Credit cards, auto loans, business credit, and a lot of floating-rate debt do not suddenly get relief. Mortgage rates are not set directly b(money.usnews.com)itself — but it does shape how investors think about the path ahead. (cmegroup.com) ### What are markets pricing? Markets still move around meeting by meeting, but the broad debate has clearly shifted from “how many cuts?” to “are there any cuts at all?” CME’s FedWatch tool shows traders constantly repricing the odds from fed-funds futures rather than locking into one neat consensus. Barclays pus(cmegroup.com) moved. (cmegroup.com) ### Why does the timing matter? Because 2026 was supposed to be the year policy got easier. Barclays’ own private-bank outlook months ago still penciled in a couple of cuts in 2026. Now that assumption is gone. So the real news is not just one bank changing a number — it is the collapse of a once-comfortable baseline. (privatebank.barclays.com) ### Bottom line? Barclays is saying the Fed’s inflation fight may not be over next year — not if energy keeps the pressure on. If that view spreads, the market story for 2026 changes from relief to endurance. (finance.yahoo.com)
