Barclays now sees 5%-5.25% fed funds rate by February on the back of ‘more aggressive, front-loaded’ Fed hikes

Barclays lifted its expectations for the next few rate hikes by the Federal Reserve on Thursday following September’s hotter-than-expected consumer-price-index report. The firm now expects 75 basis point rate hikes each at the Fed’s November and December meetings, versus a prior expectation for a 50-basis-point move in the final month of the year, according to a note by Jonathan Millar, Pooja Sriram and others at the firm. Barclays also sees a 50-basis-point rate hike in February, up from a prior expectation of 25 basis points — all of which would take the fed funds rate up to 5% to 5.25%. September’s CPI data also had traders readjusting their rate hike expectations, while Treasurys sold off aggressively and all three major stock indexes fell in morning trading.