The Federal Reserve's decision to cut interest rates and signal further cuts is not a "dovish policy mistake," as some observers claim, according to Barclays analysts.

In a note to clients, the bank noted that the Fed's inflation forecasts are "reasonable," and that comments by Fed Chairman Jerome Powell did not indicate a desire to quickly lower rates.

They added that if the Fed decides to gradually reduce borrowing costs, this could encourage investors to convert short-term debt into longer-term debt.

This approach could allow for longer maturities, which in turn could potentially allow traders to take advantage of lower interest rates and free up short-term working capital.

As a result, the analysts maintained their recommendation to take a long position in the swap contracts underlying the so-called U.S. five-year/five-year forward indicator of market inflation expectations—also known as "5y5y." This indicator is based on the breakeven rate, or the difference between the yield on inflation-linked Treasury bonds and their nominal counterparts.

"The key takeaway for the market is that the Fed is moving toward a neutral stance, but with some reluctance, likely reflecting optimistic economic assumptions," analysts said, referring to the theoretical "neutral" rate, which neither helps nor hinders growth.

"Если экономика будет такой сильной, как прогнозирует ФРС, они могут сократить ставку меньше, чем то, что рынок закладывает в цены в настоящее время. Если она будет слабой, они, вероятно, соответствуют или превысят форвардные ожидания".

Комментарии появились после того, как ФРС, как и ожидалось, снизила ставки в среду, уменьшив стоимость заимствований на четверть пункта до целевого диапазона от 4% до 4,25%, и указала, что еще два снижения ожидаются в октябре и декабре.

Powell described the cut as a form of "risk management" as the central bank seeks to balance the dual pressures of a softening labor market and persistent inflation.

But Powell signaled that recent weak employment data is weighing heavily on officials' thinking, arguing that "downside risks to employment have increased." Accelerating inflation, on the other hand, was seen as a more temporary problem.

Theoretically, lowering interest rates could stimulate investment and hiring, albeit with the risk of increasing inflationary pressures.

Importantly, the Fed's announcement included new forecasts showing that officials expect another half-percentage point of rate cuts by the end of 2025.

If this occurs, borrowing costs will remain in the range of 3.5% to 3.75%—a decline from the level previously envisaged by policymakers when the last forecast was released in June. However, seven of the 19 estimates forecast fewer cuts this year, with one even calling for rates to remain at their previous levels of 4.25% to 4.5% until the end of the year. This means the debate could be fierce ahead of the Fed's next meetings in October and December.

Markets, for their part, are currently pricing a 25 basis point cut in October at about 92%, and a similar cut in December at about 80%, according to CME's FedWatch tool.

Meanwhile, the Fed's forecasts showed that most policymakers expect the economy to grow by 1.6% this year, above the June forecast. The unemployment rate is expected to end the year at 4.5%, and core inflation at 3.1%. Price growth is now not expected to slow to the Fed's 2% target until 2028.