Barclays Reaffirms Rate Cut Expectations: Two Fed Moves Projected for 2026

Barclays has reaffirmed its outlook for monetary policy easing next year, projecting that the Federal Reserve will execute rate cuts on two separate occasions during 2026. The bank’s U.S. economic team expects cuts of 25 basis points each, with March and June identified as the likely timing for these policy adjustments.

According to Barclays’ latest analysis, the risk of postponing these cuts beyond the projected timeline appears more pronounced than the base-case scenario currently priced into markets. This assessment suggests tighter monetary conditions could persist longer than anticipated, introducing uncertainty into the economic trajectory.

The Federal Reserve’s December policy meeting minutes provide support for Barclays’ perspective, with officials signaling a cautious stance heading into January’s gathering. The central bank is expected to maintain rates at their current levels next month, as policymakers require additional time to evaluate the full effects of the recent cutting cycle on both inflation and employment metrics.

The Federal Open Market Committee’s measured approach reflects a broader pattern of data-dependent decision-making, where the committee prioritizes comprehensive economic assessment over predetermined policy paths. This framework explains why rate cuts—while anticipated by Barclays and other forecasters—are unlikely to materialize in the near term.