Barclays Predicts Two More Fed Rate Hikes This Year After Warsh Remarks

Barclays economists now expect the Federal Reserve to deliver two more interest rate increases before the end of the year, according to a Reuters report published Monday. The forecast follows a speech by Fed Governor Kevin Warsh, whose tough remarks on inflation shifted market expectations for monetary policy.

Reuters reports that Barclays revised its outlook after Warsh signaled a firm commitment to curbing price pressures. The bank’s analysts now see the central bank acting twice more in 2026, a change from earlier projections that assumed a pause in the tightening cycle.

Warsh’s comments have rippled through financial markets. According to Bloomberg, bond investors have grown cautious, with many wagering that the Fed is poised to resume hiking after a period of stability. Treasury yields ticked lower on Monday, though CNBC attributed that move more to renewed focus on the U.S.-Iran conflict than to the rate debate.

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The New York Times described Warsh as facing a “no-win situation” on rates, noting that his hawkish stance leaves little room for error if inflation data softens. The Washington Post, meanwhile, framed the Fed’s challenge as confronting a “powerful new economic force,” though the article’s details were not available in the summary.

For now, the key question is whether Warsh’s rhetoric translates into action at the next policy meeting. Barclays’ call suggests the bank believes it will, but markets remain split on the timing and size of any further moves. Investors will watch upcoming inflation data and Fed communications for clues on whether the two-hike forecast holds.