Barclays expects the Fed to deliver the next interest cut in July

 

Barclays has revised its forecast for the next U.S. Federal Reserve interest rate cut, now anticipating it will occur in July instead of June. This adjustment follows the release of stronger-than-expected April nonfarm payroll data, which showed a notable increase in job additions and a steady unemployment rate at 4.2% .

The robust employment figures suggest the U.S. economy is performing better than anticipated, leading Barclays and Goldman Sachs to delay their expectations for the Fed's rate cut. Previously, Barclays had projected two quarter-point rate cuts in June and September . However, the latest labor market data has prompted a reassessment of this outlook.

Financial markets have responded to the strong jobs report with a shift in expectations, now pricing in a higher probability of a rate cut in July rather than June. This change reflects the Fed's likely cautious approach, balancing the need to support economic growth while ensuring inflation remains under control.