Barclays: The Fed is unlikely to cut rates by 50 basis points in September

ChainCatcher news, according to Jinshi reports, Barclays, the second largest bank in the UK, now expects the Federal Reserve FOMC to cut interest rates three times this year in September, November, and December, each by 25 basis points.

Assuming the labor market shows continued resilience in the August report, the unemployment rate will stop rising. Based on this assumption, it is currently considered unreasonable to expect a 50 basis point cut in September. However, if the unemployment rate rises further, it will raise concerns that the cooling of the labor market is happening faster than expected.

Looking ahead to 2025, the unemployment rate is expected to gradually decline to 4.2%, with inflation forecasts remaining unchanged. It continues to be expected that the FOMC will cut rates three times next year in March, June, and September, and concerns about a lack of further progress on inflation in the second half of 2025 will lead the FOMC to pause rate cuts after the federal funds rate reaches a range of 3.75-4.00%. In the long term, it continues to believe that the neutral interest rate level is around 3.00-3.25%.