Barclays forecasts Fed to stand pat on rates in January

Barclays said on Wednesday it no longer expects the U.S. Federal Reserve to raise interest rates in January, compared with an earlier forecast of a 25-basis-point hike.

Rates will remain unchanged until December next year, the brokerage said.

The brokerage expects the central bank to start cutting rates by 25 bps every other meeting after the end of next year which would bring the Fed funds target range to 5 -5.25 percent at the end of 2024 and 4-4.25 percent by the 2025 end.

READ: Traders bet Fed rate hikes are over, cuts to start in 2024

“We continue to think, however, that risks are tilted to the upside, with rate hikes likely in 2024, if progress on disinflation stalls,” economists at Barclays led by Marc Giannoni said.

Fed officials agreed at their last policy meeting that they would proceed “carefully” and raise interest rates only if progress in controlling inflation faltered, the minutes of the Oct. 31-Nov. 1 gathering showed on Tuesday.