Bank of America adjusts its Federal Reserve forecast: Two rate cuts expected in 2026

Odaily Planet Daily reports that Bank of America Global Research stated on Monday that, given the weak labor market and recent comments from policymakers hinting at an earlier rate cut, they now expect the Federal Reserve to cut interest rates by 25 basis points at its December meeting. The bank previously anticipated the Fed would keep rates unchanged at the December meeting, but now predicts further 25 basis point cuts in June and July 2026, ultimately bringing rates down to a range of 3.00%-3.25%. Bank of America analysts noted in a report, "Our forecast for further rate cuts next year is based on leadership changes, not an interpretation of the economy." It has been reported that White House National Economic Council Director Hassett has become the leading candidate for the next Fed chair. Bank of America added, "We believe that if rates are cut next week, the Fed will increase the risk of policy moving into easing territory as fiscal stimulus measures take effect." Currently, most major global investment banks expect the Fed to cut rates by 25 basis points next week, with only a few institutions such as Morgan Stanley and Standard Chartered predicting that rates will remain unchanged. (Jinshi)