Barclays Predicts Fed Will Not Cut Rates in 2026

Barclays’ projection that the Federal Reserve will refrain from cutting rates in 2026 eliminates the anticipated easing signal in markets. This development could trigger short‑term selling pressure in global equity markets and push bond yields higher. The Turkish Lira may strengthen as U.S. rates remain elevated, but if inflationary pressures persist, risk assets could weaken. Overall, market uncertainty is likely to increase and risk appetite may decline.

Barclays’ projection that the Federal Reserve will not cut rates in 2026 could exert short‑term pressure on growth‑oriented technology shares. Alphabet Inc. (GOOGL) has posted a 3.8% gain over the past 24 hours and is trading above its 20‑day simple moving average, indicating strong current momentum. However, the MACD lies below its signal line and the RSI is close to 68, placing the stock in an overbought territory. This combination raises the likelihood of a modest pullback in the near term. Overall, market reaction may lean toward a slight decline, but a significant move is not anticipated.

Barclays’ forecast that the Federal Reserve will not cut rates in 2026 is being viewed as a dollar‑supportive development. The U.S. Dollar Index (DXY) is currently trading at 97.84, slightly below its 20‑ and 50‑day moving averages, which could signal short‑term corrective pressure. However, the absence of rate‑cut expectations may strengthen the dollar over the long term. Within a 1‑ to 3‑day horizon, markets could register a modest rally to reflect the positive outlook. Technical indicators—RSI at 33.8 and a negative MACD—suggest short‑term weakness, but the news effect could still lead to a mild rebound in the DXY.

Barclays' forecast that the Fed will not cut rates in 2026 could be perceived as a positive signal for the USD. USDJPY is trading at 156.684, just below the 20-day SMA and above the 50-day SMA, indicating a short-term uptrend. The RSI at 46 is not in overbought or oversold territory, allowing room for further upside. While the MACD slightly below the signal line may suggest mild bearish pressure in the near term, the underlying news sentiment could outweigh this. Over the next 1-3 days, JPY weakness and USD strength can be expected.