In a note, Barclays has said it now forecasts that the US Federal Reserve will hike its key rate by 25 basis points in January, instead of its previous prediction of performing the hike in December.

The brokerage attributed its changed forecast to softer than expected October employment data and a less aggressive tone in comments by the Fed. The Federal Reserve has been closely watching the employment data, off a belief that an overheated job market was contributing to wage growth, and producing inflationary forces which were driving prices higher.

On Friday, the closely watched employment report from the Labor Department registered a rise in unemployment, to 3.9% last month. It marked the highest reading since January of 2022, and was an increase over the 3.8% reading of September.

In the note, dated November 3rd, the Barclays economists said, “We continue to think the FOMC (Federal Open Market Committee) will need to proceed with additional tightening and will have to maintain a higher rate path than expected by the market, with no rate cut prior to September 2024.”