Recently, a fascinating "debate" has erupted in the international investment banking circle. JPMorgan Chase and Barclays have presented completely different scenarios regarding what the Federal Reserve will do in 2026.

How big is the disagreement between these two institutions? JPMorgan Chase has completely shifted to a hawkish stance, moving from their previous expectation of a rate cut in January 2026 to now believing that there may be no cuts throughout the year, and even expecting a 25 basis point hike in Q3 2027. Meanwhile, Barclays still maintains that there will be two 25 basis point rate cuts in 2026, but has pushed the timing from March and June to June and December. It seems both are adjusting their expectations, but in completely opposite directions.

Why is this happening? The core reason is their differing assessments of the US economy.

JPMorgan Chase's logic is as follows: The resilience of the US economy far exceeds expectations. They believe that in 2026, the US economy can maintain growth above 2% without slipping into recession. Why are they so optimistic? The reason is the large-scale application of artificial intelligence technology, such as autonomous driving systems and robots, which will stimulate huge market demand and drive overall economic growth.

Another issue is inflation. JPMorgan Chase thinks inflation may not come down as easily. If the economy remains resilient and inflation remains sticky, the need for rate cuts becomes less urgent.

Barclays, on the other hand, is relatively more moderate. Although they also see economic uncertainties, they still believe there will be room to signal some policy easing by mid-year and year-end.