Bank of America Predicts Fed to Hike 75 Basis Points in 2026

Odaily Planet Daily News: Due to the resilience of economic data and rising expectations of a hawkish Federal Reserve under new Chairman Kevin Warsh, Bank of America predicts the Fed will raise interest rates by 75 basis points in 2026.

The institution expects the Fed to raise rates in September, October, and December respectively, compared to its previous forecast of no change in rates this year. The hawkish outlook from Fed policymakers coincides with a strong labor market and concerns over rising inflation. Analysts at BofA Global Research stated that the June summary of projections and Kevin Warsh's remarks indicate a more hawkish reaction function than anticipated. After these three rate hikes this year, the institution's analysts expect the Fed to hold rates steady in 2027. (Reuters)