Barclays says a Fed rate cut still expected in 2025, but the risks of no cut is rising

The data from the US on Wednesday is here:

• Forexlive Americas FX news wrap 12 Feb: Higher US CPI pushes yields higher. USD is mixed

Earlier responses;

Fed likely to stay on hold despite strong CPI, rate cuts expected in Q3

• Bank of America: Strong CPI underscores Fed's caution, rate hikes back in discussion

• Morgan Stanley hasn't changed its Federal Reserve forecast despite strong US CPI report
• Goldman Sachs revises core PCE inflation forecast higher after CPI report

Barclays analysts maintain their expectation of a single Federal Reserve rate cut this year, but warn that the risks of no cuts at all are increasing. In their latest assessment, they highlight growing market focus on the possibility of rate hikes, reflecting persistent inflation concerns and a resilient U.S. economy.

While Barclays still sees monetary easing on the horizon, they acknowledge that stronger-than-expected economic data could delay or even eliminate the need for cuts in 2025. With the Fed keeping a data-dependent approach, market participants are closely watching upcoming inflation reports and labor market trends for further policy signals.