BofA: Fed rate cuts unlikely before 2027

According to a new forecast from Bank of America (BofA), the Federal Reserve is expected to delay interest rate cuts until the second half of 2027, citing high inflation and robust employment growth. BofA Global Research had previously projected two rate cuts this year, one each in September and October. This was based in part on the expectation that Kevin Warsh, President Trump's nominee to succeed Jerome Powell as Fed Chair, would steer the central bank toward monetary easing. However, the forecast has been revised due to changing economic conditions. BofA economists noted that they no longer expect a Fed rate cut this year, adding that complex economic shocks, including the war in Iran, tariffs, and the rise of artificial intelligence (AI), are making it more difficult to predict rate movements.