Summary
- Bank of America said it now expects the U.S. Federal Reserve’s first rate cut in mid-2027, pushing back its previous forecast from late 2026.
- It said persistent inflation, energy price pressure from rising global oil prices, and growth in private-sector employment alongside a stable unemployment rate support the Fed’s hawkish stance.
- Markets are watching how a potential shift in the Fed’s rate path could affect stocks, commodities and cryptocurrencies, with the consumer price index (CPI) and employment data seen as key variables.
Forecast Trend Report by Period
Bank of America has pushed back its forecast for the Federal Reserve’s first interest-rate cut, citing persistent inflation pressures.
Walter Bloomberg reported on May 11 that BofA now expects the Fed to begin cutting rates in mid-2027, compared with its previous forecast for late 2026.
The bank cited the Fed’s hawkish stance and inflation that remains above target as the main reasons for the revision.
It also said rising global oil prices are adding to price pressures through higher energy costs.
BofA said growth in private-sector employment and a stable unemployment rate are reducing the need for the Fed to move quickly on rate cuts.
The bank also said recent economic data have not shown enough weakness in the labor market to justify early easing.
Markets are watching how a potential shift in the Fed’s rate path could affect stocks, commodities and cryptocurrencies. Upcoming consumer price index data and employment indicators are expected to be key variables.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
