Wall Street divided on Fed policy path as Barclays joins hawkish camp

Here are the forecasts from major brokerages for 2026: | Brokerage | Total cuts/hikes in 2026 | No. of cuts/hikes in 2026 | Fed funds rate | | --- | --- | --- | --- | | Citigroup | 50 bps of cuts | 2 (in October and December) | 3.00%-3.25% | | Wells Fargo | No policy change | - | 3.50%-3.75% | | UBS Global Wealth Management | No policy change | - | 3.50%-3.75% | | UBS Global Research | No policy change | - | 3.50%-3.75% | | Goldman Sachs | No policy change | - | 3.50%-3.75% | | Nomura | No policy change | - | 3.50%-3.75% | | Barclays | 50 bps of hikes | 2 (in September and December) | 4.00%-4.25% | | Morgan Stanley | No policy change | - | 3.50%-3.75% | | HSBC | No policy change | - | 3.50%-3.75% | | Standard Chartered | No policy change | - | 3.50%-3.75% | | Societe Generale | No policy change | - | 3.50%-3.75% | | BofA Global Research | 75 bps of hikes | 3 (September, October and December) | 4.25%-4.50% | | Deutsche Bank | 50 bps of hikes | 2 (September and December) | 4.00%-4.25% | | Macquarie | Rate hike in Q4 2026 | - | 3.75%-4.00% | | BNP Paribas | 25 bps rate hike | 1 (December) | 3.75%-4.00% | | J.P.Morgan | 25 bps rate hike | 1 (December) | 3.75%-4.00% | | Wells Fargo Investment Institute | 25 bps rate hike | 1 | 3.75%-4.00% | * Wells Fargo Investment Institute is a wholly owned subsidiary of Wells Fargo Bank Barclays became the latest brokerage to forecast rate hikes this year after hawkish commentary from Fed Chair Kevin Warsh at Jackson Hole, widening the split among Wall Street firms over whether inflation risks could drive further tightening. Speaking on Friday, Warsh said central bank policymakers would "have work to do" if they were not confident inflation was returning to the Federal Reserve's 2% target, his clearest indication yet that an increase in lending rates could be needed. Focus now turns to the Fed's September 15-16 policy meeting, where officials will weigh upcoming inflation and employment data as they decide on the interest-rate trajectory. Traders are pricing in about a 62% chance of a 25-basis-point Fed rate hike in September, up from 35.4% before Warsh's Jackson Hole speech last week, and an 88% chance that rates will be higher by December, according to CME's FedWatch tool.

Wall Street divided on Fed policy path as Barclays joins hawkish camp

Broker forecasts for 2026

Wall Street split after Warsh's Jackson Hole remarks

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Brokerage	Total cuts/hikes in 2026	No. of cuts/hikes in 2026	Fed funds rate
Citigroup	50 bps of cuts	2 (in October and December)	3.00%-3.25%
Wells Fargo	No policy change	-	3.50%-3.75%
UBS Global Wealth Management	No policy change	-	3.50%-3.75%
UBS Global Research	No policy change	-	3.50%-3.75%
Goldman Sachs	No policy change	-	3.50%-3.75%
Nomura	No policy change	-	3.50%-3.75%
Barclays	50 bps of hikes	2 (in September and December)	4.00%-4.25%
Morgan Stanley	No policy change	-