Fresh inflation figures for February just dropped in the US, and they landed below what everyone was expecting. This CPI data has economists rethinking the odds of the FED cutting interest rates, prompting Barclays to adjust their forecast.

FED Will Cut Interest Rates Two Times, Then Start Again in March 2026!

According to a Reuters report, Barclays has upped their prediction for Fed rate cuts in 2025, now anticipating two instead of just one. They point to a softening labor market, even with ongoing tariff uncertainties, as the reason.

Specifically, Barclays analysts are forecasting two 0.25% rate cuts – one in June and another in September of 2025.

Previously, they had only anticipated a single cut in June.

“The weaker labor market is pushing us to expect another rate cut, despite the stickier inflation.”

However, Barclays analysts also believe that after the anticipated September cut, the Fed will pause on further reductions for a good while, not expecting to resume the rate cut cycle again until March 2026.

No Interest Rate Cut This Year!

But not everyone is convinced by the latest inflation numbers. While Barclays is now predicting two rate cuts in 2025, economists at Nomura remain unimpressed.

In fact, Nomura doesn’t think the Fed will cut rates at all this year!

Despite the inflation data being softer than expected, Nomura analysts point out that key components of the consumer price index (CPI) – those with a bigger impact on core PCE inflation – actually came in stronger than anticipated.

These economists foresee PCE continuing its upward trend, which they believe will push the Fed to adopt a more hawkish monetary policy and hold off on any rate cuts.

When is the FED Meeting?

So, when can we expect to hear from the Fed directly? The next FED meeting announcement, including their interest rate decision for March, is scheduled for Wednesday, March 19th. Current expectations are firmly set on interest rates remaining unchanged.

*Please remember, this is not financial advice.