(Bloomberg) -- Barclays Plc, which was among the first major banks to shift its Federal Reserve prediction for June to a 75-basis-point hike, has said that it anticipates the central bank will return to hiking at a 50-basis-point pace in July.
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The UK-based bank correctly forecast Wednesday’s three-quarter-point hike after changing its view in the wake of the latest US consumer-price inflation report.
“We now expect the Fed to shift back to a 50bp hike at the July 27 meeting, bucking current market expectations,” Barclays economists wrote in a note released after the Wednesday decision. The bank pointed to “signs that consumption and the US housing market are slowing.”
Chair Jerome Powell, speaking at his post-decision press conference, said that he doesn’t expect 75-basis-point moves to be common but kept open the prospect of 50- and 75-basis-point moves in the future.
The market at one point moved to fully price in a move of 75 for July, but has since moved to price in somewhere between 50 and 75 following Powell’s remarks.
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