Barclays Expects Fed to Hold Rates Unchanged Until End of 2027

According to Barclays, on July 9, the bank's baseline expectation is that the Federal Reserve will maintain interest rates unchanged until the end of 2027. However, Barclays strategists still see upside risks toward rate hikes, citing the Fed's latest policy meeting minutes which highlighted intensified concerns about inflation among participants and persistent risks of above-target inflation growth.

The strategists noted that participants expect inflation to moderate, but recognize the risk of sustained high inflation, partly driven by strong demand for artificial intelligence-related investments.