Barclays Expects Fed to Hold Rates Unchanged Through End of 2027

According to Barclays, as of July 9, the Federal Reserve is expected to hold interest rates unchanged through the end of 2027 based on the bank's baseline forecast. However, Barclays strategists said downside risks remain tilted toward rate hikes. The latest Federal Reserve policy meeting minutes revealed heightened concerns among officials about inflation persistence and the risk of sustained elevated price pressures.

Barcleys strategists noted that while Fed officials expect inflation to decline, they see risks of inflation remaining elevated, partly driven by robust demand for artificial intelligence-related investments. Additionally, officials continue to hold divergent views on future policy direction.