by Subhadeep Chakravarty
November 22 (Reuters) – Barclays announced on Wednesday that it no longer anticipated an increase in interest rates from the US Federal Reserve (Fed) in January while the intermediary had previously forecast an increase in the cost of credit in the United States by 25 basis points, which would have brought the federal funds rate to 5.50%-5.75%.
The British investment bank estimates that rates will remain broadly unchanged in the United States until December 2024.
She expects the Fed to lower the federal funds rate target to 5.00%-5.25% at the end of 2024 and to 4.00%-4.25% at the end of 2025.
“However, we continue to believe that risks are tilted to the upside, with rate hikes likely in 2024, if progress on disinflation fades,” Barclays economists write in a report led by Marc Giannoni .
At their latest monetary policy meeting, Fed officials agreed to proceed “cautiously” and only raise interest rates if progress in controlling inflation falters, Tuesday showed evening the report of this meeting which was held from October 31 to November 1.
Contrary to most of the major Wall Street banks which had already indicated that they expected a probable end to the Fed’s rate hikes, Barclays had so far maintained its forecasts of an additional increase in the interest rate in January. 2024 before this Wednesday’s announcement. (Reporting Subhadeep Chakravarty; French version Claude Chendjou, edited by Blandine Hénault)