Bank of America Predicts Fed Rate Cuts Delayed Until 2027

Bank of America (BAC) has revised its forecast, now predicting that the U.S. Federal Reserve will delay interest rate cuts until the second half of 2027 due to persistent inflation and strong employment growth. According to PANews, BAC's global research team had previously anticipated rate cuts in September and October this year, partly based on the expectation that U.S. President Donald Trump would nominate Kevin Warsh to replace Jerome Powell as Fed Chair, with Warsh expected to lead a shift towards looser monetary policy. However, changing economic conditions have altered this outlook. BAC economists stated in a report to clients on Friday, May 8, that they no longer expect the Fed to cut rates this year.