Bank of America’s forecast has crossed out the words “rate-cut path” altogether.
Bank of America predicts that the Federal Reserve will raise rates by 25 basis points each in December 2026, January 2027, and March 2027—a more hawkish pace than the dot plot suggests. The bias is bearish. Rising rate-hike expectations could push up Treasury yields and the dollar, raising discount rates for risk assets. High-beta assets like BTC and ETH would be among the first to take a hit, and rallies previously supported by expectations of monetary easing could easily face selling pressure.
For holders, this is not a minor tweak in a research report, but a repricing of macro liquidity conditions. If CPI and PCE remain sticky above 2%, rate-hike bets could become further self-reinforcing. Conversely, if the data weakens, this forecast could quickly be disproven by the market.
In terms of positioning, keep a close eye on Treasury yields and the Fed’s wording at its December meeting. Until yields fall meaningfully, chasing risk assets offers an unfavorable risk-reward profile. Reducing exposure and waiting on the sidelines, or waiting for confirmation signals, may be more prudent. Related assets: BTC and ETH. Bias: bearish.
Source: BlockBeats
Are you paying closer attention to Treasury yields or the Fed’s wording at its December meeting?
Image 1: Bank of America warns the Fed may resume rate hikes starting in late 2026 · Key Points
Image source: https://www.theblockbeats.info/flash/377241
Bank of America predicts that the Federal Reserve will raise rates by 25 basis points each in December 2026, January 2027, and March 2027—a more hawkish pace than the dot plot suggests. The bias is bearish. Rising rate-hike expectations could push up Treasury yields and the dollar, raising discount rates for risk assets. High-beta assets like BTC and ETH would be among the first to take a hit, and rallies previously supported by expectations of monetary easing could easily face selling pressure.
For holders, this is not a minor tweak in a research report, but a repricing of macro liquidity conditions. If CPI and PCE remain sticky above 2%, rate-hike bets could become further self-reinforcing. Conversely, if the data weakens, this forecast could quickly be disproven by the market.
In terms of positioning, keep a close eye on Treasury yields and the Fed’s wording at its December meeting. Until yields fall meaningfully, chasing risk assets offers an unfavorable risk-reward profile. Reducing exposure and waiting on the sidelines, or waiting for confirmation signals, may be more prudent. Related assets: BTC and ETH. Bias: bearish.
Source: BlockBeats
Are you paying closer attention to Treasury yields or the Fed’s wording at its December meeting?
Image 1: Bank of America warns the Fed may resume rate hikes starting in late 2026 · Key Points
Image source: https://www.theblockbeats.info/flash/377241
