Barclays: Expects the Federal Reserve to cut interest rates by 25 basis points in September, November, and December

Barclays released a report stating that considering the disappointing US job data in July, it is currently expected that the Federal Reserve will cut interest rates three times this year, by 25 basis points each in September, November, and December, and three more times next year. The bank believes that an imminent economic recession will not prompt the Federal Reserve to significantly cut interest rates. Barclays predicts that the US unemployment rate will rise to 4.3% in the third quarter and further to 4.4% in the fourth quarter, higher than the median of the Federal Open Market Committee (FOMC) long-term normal unemployment rate forecast in June. The gradual increase in the unemployment rate will prove that an additional 25 basis point cut in the federal funds rate this year is reasonable. Barclays points out that assuming the labor market shows continued resilience in August and the unemployment rate stops rising, it is unreasonable to expect a 50 basis point rate cut at the September meeting