@BankofAmerica's revised Fed call: hikes in Dec '26 and Mar '27
@BankofAmerica's revised Fed call puts quarterly hikes in Dec '26 and Mar '27, with a terminal rate of 4.25-4.5% through 2027. The market prices a 60% chance of hikes.
The path depends on inflation. @BankofAmerica sees potential for 25-50bp of additional hikes if inflation outpaces the Fed, or a pause after the Dec '26 hike if inflation cools sharply.
Growth tracking has softened alongside that call. @BankofAmerica cut its 3Q GDP tracking estimate to 3.5% q/q saar versus consensus of 3.7%, driven by weaker trade and inventory data. That points to near-term growth moderation even as @BankofAmerica expects further tightening.
@BankofAmerica's revised Fed call puts quarterly hikes in Dec '26 and Mar '27, with a terminal rate of 4.25-4.5% through 2027. The market prices a 60% chance of hikes.
The path depends on inflation. @BankofAmerica sees potential for 25-50bp of additional hikes if inflation outpaces the Fed, or a pause after the Dec '26 hike if inflation cools sharply.
Growth tracking has softened alongside that call. @BankofAmerica cut its 3Q GDP tracking estimate to 3.5% q/q saar versus consensus of 3.7%, driven by weaker trade and inventory data. That points to near-term growth moderation even as @BankofAmerica expects further tightening.