Bank of America Global Research now forecasts the first U.S. Federal Reserve interest rate cuts for July and September 2027. The firm anticipates two separate reductions of 25 basis points. This revision delays the previous projection of a September 2026 start by nearly a year.
Persistent inflation risks and high energy prices drove the updated outlook. Continued strength in the U.S. labor market also influenced the shift. Stronger-than-expected employment data reinforces expectations that the central bank will hold rates steady to reach its 2% inflation target.