Back
Bank of America CEO sees Fed raising rates in September, October and December

Bank of America CEO sees Fed raising rates in September, October and December

Bank of America now expects 75 basis points of Fed tightening this year, a shift from its earlier forecast of no 2026 rate changes and a more hawkish view than much of the market.

Fact Check
Multiple independent sources, including Reuters (via Asharq Al-Awsat), Yahoo Finance, and the caller-supplied Cryptobriefing article, confirm Bank of America revised its forecast to expect 75 basis points of Fed tightening in 2026, distributed across September, October, and December FOMC meetings. All sources agree this reverses BofA's earlier no-change view and is more hawkish than market consensus (markets priced only ~42 bps). This matches the claim precisely.
    Reference: 123
Summary

Bank of America expects the Federal Reserve to raise interest rates in September, October and December, for a total of 75 basis points of tightening that would lift the federal funds target range to 4.25%-4.50%. The updated outlook marks a sharp change from the bank's earlier forecast of no rate changes in 2026 and aligns with the Fed's June 2026 projections, whose median year-end estimate pointed to at least one increase. The forecast adds to signs that market pricing is adjusting to the possibility of a more aggressive policy path, with investors now focused on upcoming Fed meetings, inflation and labor-market data, and comments from Chairman Kevin Warsh for confirmation of whether the expected hikes materialize.

Terms & Concepts
  • basis points: A unit equal to one-hundredth of a percentage point, commonly used to describe interest-rate changes.
  • federal funds target range: The interest-rate band set by the Federal Reserve that guides short-term borrowing costs across the U.S. financial system.
  • hawkish: A policy stance that favors higher interest rates or tighter monetary conditions to contain inflation.