PANews reported on August 4 that according to Jinshi, Barclays, the second largest bank in the UK, said that it now expects the Federal Reserve FOMC to cut interest rates three times this year in September, November and December, each time by 25 basis points. Assuming that the labor market will show continued resilience in the August report and the unemployment rate will stop rising, Barclays currently believes that a 50 basis point rate cut in September is unreasonable based on this assumption.
However, if the unemployment rate rises further, it will raise concerns that the labor market is cooling faster than expected. Looking ahead to 2025, Barclays expects the unemployment rate to gradually fall to 4.2%, and the inflation forecast will remain unchanged. Barclays continues to expect the FOMC to cut interest rates three times in March, June and September next year, and expects that concerns about the lack of further progress in inflation in the second half of 2025 will cause the FOMC to pause its interest rate cuts after the federal funds rate range reaches 3.75-4.00%. In the long run, Barclays continues to believe that the neutral interest rate level is around 3.00-3.25%.
