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Macro

Barclays now expects Fed rate hikes in December and January

Barclays said on October 16 it expects the Federal Reserve to raise interest rates by 25 basis points in both December and January, revising its earlier forecast of a single hike in December. The bank had previously projected only a December increase. The updated call points to a longer tightening path than Barclays had earlier anticipated.

Original source

AI take

The revision matters less for the two hikes themselves than for what it signals about how forecasters are reading the Fed's reaction function: a single move is being repriced as a short sequence, implying the tightening cycle is seen as extending rather than ending. That shifts the discount-rate backdrop for every duration-sensitive asset, crypto and tokenized real-world assets included, since both trade heavily off the rate path. The open question is whether other sell-side desks follow Barclays in adding a second hike, or treat it as an outlier call.

Generated by AI for reference only.

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