Federal Reserve's 2026 rate cut timetable emerges: Barclays targets the first 25 basis point cut in March

Barclays confirms its expectations for the Fed’s rate cuts in 2026 in its latest report, providing a specific timeline. This outlook aligns with the signals from the December FOMC minutes, offering the market a relatively clear policy direction. For crypto assets, expectations of rate cuts generally imply an improved liquidity environment, but the multiple risks facing the U.S. economy also warrant attention.

Barclays’ Rate Cut Expectations

Barclays’ U.S. economists maintain their forecast for the Fed to cut rates in 2026, with the following details:

Why hold steady in January?

Barclays’ economists note that the main reason the Fed will keep rates unchanged at the January meeting is that “the Federal Open Market Committee needs time to assess the impact of recent rate cuts.” The logic is straightforward: the Fed has already implemented rate cuts at the end of 2024 and needs an observation period to see their actual effects on the economy. This is consistent with the information revealed in the December FOMC minutes.

Macro Background: Risks and Opportunities of Rate Cuts Coexist

According to the latest institutional analysis, the U.S. economy in 2026 faces multiple complex factors that could influence the Fed’s rate cut decisions.

Risk Factors Assessment

• Tariff Pressures: Several institutions warn that tariff policies in 2026 could become a drag on economic growth. The US Capital Group believes tariffs and a weak labor market may suppress growth in the first half of the year; Lazard Asset Management expects tariff hikes to push U.S. inflation higher in the first half of 2026.
• Inflation Concerns: While Citigroup believes that tariffs are unlikely to cause serious global inflation shocks at this stage, institutions like BNP Paribas and Columbia Threadneedle point out that tariff hikes could lead to sustained inflationary pressures, which would constrain the Fed’s room to cut rates.
• Labor Market: A soft employment market is listed by multiple institutions as a limiting factor for economic growth in the first half of the year.

Barclays’ View

Barclays believes that, compared to the baseline scenario of “two rate cuts in 2026,” the risk of delaying rate cuts is greater. In other words, they tend to think that economic growth pressures may outweigh inflation concerns, prompting the Fed to proceed with rate cuts as scheduled.

Market Implications

Liquidity Environment for Crypto Assets

Rate cuts typically mean increased dollar liquidity, which is generally positive for risk assets including Bitcoin. Barclays’ rate cut expectations provide the market with a relatively clear policy outlook, aiding asset allocation planning. However, it is important to note that this outlook is based on current information; if macroeconomic conditions change significantly (e.g., inflation data exceeds expectations), the Fed may adjust its plans.

Uncertainty Remains

From related news, uncertainty regarding tariff policies in 2026 remains high. Even if the Supreme Court overturns some tariffs imposed by the Trump administration, the government’s increasing reliance on tariff revenues suggests trade barriers could be maintained in other forms. This policy uncertainty could complicate the Fed’s decision-making process and impact the actual pace of rate cuts.

Summary

Barclays’ rate cut expectations outline a relatively clear timeline: hold steady in January, then cut 25 basis points in March and June. This outlook aligns with the latest signals from the Fed. However, the U.S. economy in 2026 faces multiple risks—including tariffs, inflation, and employment—that could influence the actual rate cut process. Market participants should consider this baseline when allocating assets, while also staying attentive to macroeconomic data and policy developments to prepare for potential adjustments.