Barclays projects in the United States feed them to provide 2 discounts at 2025 average
Barclays has reduced her expectations. Now, you think the federal reserve will reduce interest rates twice this year instead of once. This is due to the unclear trade policy and the weakening of the labor market in the United States.
Parklise analysts He saidand “The most soft labor market makes us add another price reduction, despite the high inflation.” I previously expected one point in 25 Basis in June.
According to analysts, the reduction of the first rate in June will reflect indicators of the slower growth and high unemployment. The reduction of the second price in September will reflect indicators of the high unemployment rate and some signs of improvement in monthly inflation publications.
After reducing the interest rate in September, Barclays believes that the central bank will take a long break and begin to reduce prices again in March 2026.
The demand for workers – Barclays will decrease
Consumer prices in the United States rose lower than expected in February. The Consumer Prices Index (CPI) increased by 0.2 % last month after an increase of 0.5 % in January. Economists expected the consumer price index to increase by 0.3 %.
Prices have increased by 0.2 % on a “basic” scale, which excludes the most volatile costs of things like gas and food. This was 0.4 % lower monthly profit and 3.1 % than the previous year. This has been the smallest annual increase in the basic consumer price index since April 2021.
It was also less than 3.3 % in the basic prices seen in the previous month and more than expected expected in Bloomberg. This was the first time since July, as both consumer price index and the basic CPI showed that prices are rising less at a lower speed. This is relief, given the uncertainty about Trump’s policies.
Therefore, Barclays believes that the demand for workers this year will decline with the slowdown in the labor market. They said, “We believe that the relatively sharp slowdown in job gains will only be accompanied by a moderate height of the unemployment rate, which will reach its peak by 4.3 % in October.”
Barclays also decreased its growth predictions for the Q4/Q4 2025 from 1.5 % to 0.7 %.
Federal Reserve’s position on interest rates
Recently, Jerome Powell, head of the Federal Reserve, said that the central bank is not in a hurry to reduce interest rates because uncertainty in politics still makes the markets nervous and expectations for the US economy are not sure.
Powell said, With the analysis of the information received, we focus on the signal separation from the noise with the development of the receiving view […] We do not need to be in a hurry and we are in a good position to wait for greater clarity. “
The Central Bank President said in a question and answers session after his speech that the cost of caution is very low.
According to Powell, Trump The administration changes policies in many areas, such as trade, taxes, government spending, immigration and rules. He also said that what matters to the economy and interest rate policies at the Federal Reserve is the pure effect of these changes.
At the January meeting in January, the Federal Reserve kept the interest rate overnight between 4.25 and 4.50 %. President Jerome Powell said the bank would wait to reduce prices again until reports of inflation and jobs showed that time had come. The next meeting of the Federal Open Market Committee (FOMC) was appointed on March 18 and 19.
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