Bank of America: Fed Unlikely to Cut Rates Before 2027

Odaily Odaily’s latest forecast indicates that the Federal Reserve will delay interest rate cuts until the second half of 2027, primarily due to relatively high inflation levels and robust job growth. Bank of America Global Research had previously anticipated the Fed would cut rates once in September and once in October this year, a view partly based on the expectation that Donald Trump would nominate Kevin Warsh to replace Jerome Powell as Fed Chair, and that Warsh would guide policymakers towards adopting accommodative monetary measures. However, this perspective has shifted amid changing economic conditions.

Bank of America economists now state, "We no longer expect the Fed to cut rates this year." They also note that multiple shocks impacting the economy, including the Iran war, tariffs, and the rise of artificial intelligence, have made predicting interest rate movements more difficult. (Jinshi)