Bank of America strategists Mark Cabana and Meghan Swiber warn that markets are underestimating how high the Federal Reserve may take its benchmark rate, potentially reaching 5.3% based on the Taylor Rule and returning toward the 5.5% upper bound reached during the 2022–2023 tightening cycle. Interest-rate swaps price three additional hikes to an effective federal funds rate of 4.5–4.75%, while BofA projects the 2-year Treasury yield could rise from approximately 4.7% as of the 18th to 5.25%, with the 10-year yield remaining near 5% through year-end. The CME FedWatch tool also indicated a better-than-even chance of a hike the following month and a 44% probability of another increase in December. Minneapolis Fed President Neel Kashkari said inflation remains broad and above the Fed’s 2% target, supporting continued tightening.