Bank of America predicts three Fed rate hikes in 2026, reversing earlier cut
Summary
Bank of America has revised its Federal Reserve outlook, now predicting three 0.25 percentage-point rate hikes in 2026 (September, October, December) that would move the benchmark rate from 3.5%-3.75% to 4.25%-4.5%. This reverses an earlier cut from December 2025 and marks a significant shift from BofA's prior base case of no rate changes. The revision follows an FOMC meeting where half of policymakers favored hikes and new Fed Chairman Kevin Warsh made hawkish remarks, reflecting growing Fed frustration with inflation remaining above the 2% target for five years.
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bskyBank of America predicts three Fed rate hikes in 2026, reversing earlier cutbriefly.coKey quotes
· 3 pulledThe Fed is fed up with inflation and will bring down the hammer with a series of rate hikes this year, reversing earlier cuts
Bank of America now expects three 0.25 percentage-point rate increases in 2026, moving the benchmark from 3.5%-3.75% to 4.25%-4.5%
The prior base case assumed no rate changes through the year
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