CoinVoice has recently learned that Barclays Bank stated that one of the factors that may keep U.S. interest rates high is the U.S. (inflation) policy. At the December meeting, some FOMC participants clearly began to reflect expectations of tariffs in their inflation forecasts. Moreover, even among those who have not adjusted their official forecasts, many now believe that the balance of inflation risks tends to be upward.
Although Powell did not explicitly answer to what extent the Federal Reserve is inclined to view the rise in price levels related to tariffs, we believe that in light of the expectation that tariffs will lead to an intensification of inflation in the second half of 2025, especially against the backdrop of rising inflation rates in recent years, it will be a challenge for the Federal Reserve to continue lowering interest rates. We expect the Federal Reserve to pause rate cuts after June next year and to resume rate cuts around mid-2026 after the inflation pressures caused by tariffs dissipate. In our baseline, we expect two 25 basis point rate cuts in 2026, with a terminal rate of 3.25-3.50%. [Original link]