Bank of America rate strategists Mark Cabana and Meghan Swiber say markets are underestimating how high the Federal Reserve may take its benchmark rate, potentially returning it to levels seen during the 2022–2023 tightening cycle, when the upper bound reached 5.5%. Interest rate swaps price three more hikes to an effective federal funds rate of 4.5–4.75%, while BofA's strategists see the rate potentially reaching 5.3%, a level also indicated by the Taylor Rule (a formula linking policy rates to inflation and output gaps). They project the 2-year Treasury yield could rise from approximately 4.7% as of the 18th to 5.25%, while the 10-year yield remains at 5% through year-end. Minneapolis Fed President Neel Kashkari said inflation remains broad and above the Fed's 2% target, supporting the central bank's tightening stance. The outlook points to a flatter yield curve (a smaller gap between short- and long-term yields), with possible implications for bond reinvestment returns, credit spreads and equity volatility.