Bank of America’s Brian Moynihan expects the Fed to raise rates three times this year to combat persistent inflation above target.
Bank of America CEO Brian Moynihan anticipates the Federal Reserve will implement three additional rate hikes in 2026, targeting September, November, and December. His outlook hinges on inflation data remaining elevated, with recent PCE figures exceeding expectations and reinforcing stickier price pressures into 2027.
Moynihan’s projection contrasts with more cautious Fed communications, offering a specific timeline rather than conditional guidance. He expects inflation to settle in the mid-2% range by late 2027, later than markets currently price, which could delay rate-cut expectations and lift front-end yields.
The CEO also dismissed concerns that higher rates would disrupt AI-driven capital expenditures, suggesting semiconductor and infrastructure stocks may remain resilient. His remarks follow stronger-than-expected inflation readings, further challenging the narrative of a swift return to the Fed’s 2% target.