Bank of America revised its monetary policy outlook to forecast three interest rate hikes in late 2026.
The bank now expects 25-basis-point increases in September, October, and December 2026. This projection reverses a previous forecast that the Federal Reserve would maintain unchanged rates through the end of the year.
The revision follows hawkish signals from Federal Reserve officials aiming to manage persistent inflation. Tightening expectations replace previous hopes for rate cuts as concerns over price stability grow.
This shift may impact financial sector lending margins and the overall cost of capital.