Bank of America adjusts Fed forecast: expected to cut rates by 25 basis points in December and will cut twice more in 2026.

[Fed Adjusts Predictions: Expected to Cut Rates by 25 Basis Points in December and Two More Cuts in 2026] Bank of America Global Research said on Monday that given the weak labor market conditions and recent comments from policymakers suggesting an earlier rate cut, it now expects the Fed to cut rates by 25 basis points at the December meeting. The bank had previously expected the Fed to keep rates unchanged at the December meeting, but now predicts further cuts of 25 basis points in June and July 2026, bringing the final rate down to a range of 3.00%-3.25%. Bank of America analysts noted in the report: “Our forecast for further cuts next year is based on leadership changes rather than an interpretation of the economy.” Reports indicate that White House National Economic Council Director Hassett has become the frontrunner to be the next Fed Chair. Bank of America added: “We believe that if a rate cut occurs next week, the Fed will increase the risk of policies entering an easing zone as fiscal stimulus measures take effect.” Currently, most major global investment banks expect the Fed to cut rates by 25 basis points next week, with only a few institutions like Morgan Stanley and Standard Chartered predicting that rates will remain unchanged. ( Jin10 )