Bank of America: No Rate Cuts Until 2027
About this episode
Bank of America predicts no Fed rate cuts until 2027 due to persistent inflation and a strong job market.
Bank of America has revised its prediction on Fed rate cuts, now anticipating no drops until the second half of 2027. This change is due to persistent inflation at 3.3%, surpassing the 2% target, and a resilient job market. The bank initially forecasted two cuts this year, but recent events like the Iran war, tariffs, and AI boom have complicated predictions. Fed officials are also cautious, with concerns about AI productivity overheating spending. The latest jobs report showed 115,000 new jobs in April, double the forecast. Other banks like Deutsche Bank agree, predicting inflation will remain above 3% due to tariffs and AI increasing tech costs. Market tools indicate less than 50% odds for cuts before late 2027, with rates currently at 3.5-3.75%. Borrowers can expect to wait longer for rate changes, allowing the economy to cool without causing further price increases, while Wall Street focuses on controlling inflation. Support the show: Get a discount at https://solipillow.com/discount/dnn. Advertise on DNN: advertise@thednn.ai This is an automated, high-level news summary based on public reporting. Report issues to feedback@thednn.ai. View sources & latest updates…
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