# Barclays Sees No Fed Rate Cuts in 2026

**Published:** 2026-07-04T18:09:58.864Z  
**Topic:** Fed Rates  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/8b9b5e71-452d-40ec-b871-a5d1568d2aa4

Barclays projects steady Fed rates through 2026 due to persistent energy-driven inflation, reversing prior cut expectations.

Barclays now anticipates the U.S. Federal Reserve will hold interest rates steady through next year, reversing a prior projection of a September 2026 rate cut. The brokerage attributes this extended pause to persistent inflation driven by elevated energy prices, complicating the central bank's path back to its 2% target [1].

| At a glance | |
|---|---|
| **Forecast Date** | May 4, 2026 |
| **Prior Outlook** | 25-basis-point cut in Sept 2026 |
| **New Outlook** | Rates steady through 2026 |
| **Key Driver** | Inflation above 2% target |

## Forecast Revision and Inflation
Barclays updated its forecast on May 4, 2026, scrapping a predicted 25-basis-point reduction in September 2026 in favor of a hold [1]. The firm now expects a reduction in March 2027, aligning with a broader reassessment among financial institutions as inflation continues to run above the Federal Reserve’s 2% target [1]. Elevated energy prices, specifically those linked to global supply disruptions, are cited as the primary factor complicating the policy environment [1]. Barclays analysts indicated that prolonged higher oil prices are expected to support both headline and core inflation measures, influencing personal consumption expenditures—the Fed's preferred benchmark [1].

## Market Reaction and Economic Impact
Financial markets have adjusted rapidly to this outlook, with CME FedWatch data indicating traders assign a high probability that the Federal Reserve will maintain current rate levels through the end of 2026 [1]. This marks a departure from earlier in the year when participants anticipated multiple rate cuts. Consequently, Treasury yields have remained elevated due to reduced demand for longer-duration bonds, while the U.S. dollar has maintained strength against major currencies as higher relative rates support capital inflows [1]. The economic picture remains mixed, as consumer spending moderates due to higher costs while business investment in energy and infrastructure remains stable [1].

## What to watch
*   **Crude oil prices and global supply disruptions** for signs of easing or further volatility that could alter inflation trajectories.
*   **Personal consumption expenditures data** for trends in energy cost pass-through to core inflation measures.
*   **Federal Open Market Committee statements** for shifts in balancing inflation risks against economic growth considerations.

The revision underscores how external energy shocks are constraining the Federal Reserve's ability to pivot policy, extending a period of restrictive financial conditions until global supply chains stabilize.

## Sources
1. Economicinsider — [Barclays Sees No Fed Rate Cuts in 2026 - Economic Insider](https://economicinsider.com/barclays-sees-no-fed-rate-cuts-in-2026/)
2. Latimes — [Why interest rates may stay very low for a lot longer - Los Angeles...](https://www.latimes.com/business/la-fi-interest-rates-20140706-story.html)

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Cite as: TrendWatcher, "Barclays Sees No Fed Rate Cuts in 2026", https://www.trendwatcher.in/article/8b9b5e71-452d-40ec-b871-a5d1568d2aa4