Bank of America Pushes First Fed Rate Cut to Mid-Late 2027 as Inflation Stays Above 2%
Updated
Updated · 24/7 Wall St. · Jun 1
Bank of America Pushes First Fed Rate Cut to Mid-Late 2027 as Inflation Stays Above 2%
3 articles · Updated · 24/7 Wall St. · Jun 1
Summary
Mid- to late 2027 is now Bank of America economists’ call for the first Federal Reserve rate cut, reflecting a longer period of restrictive policy than many investors had expected.
Persistent price pressure in services, housing, energy and tariffs is keeping inflation above the Fed’s 2% target, while a still-solid labor market is sustaining wage growth.
Oil staying above the $50-$60 a barrel range assumed for 2026, even with a peace agreement with Iran, plus rising food prices, could keep the Fed on hold for another year or more.
The forecast underscores a broader Wall Street view that the Fed is more likely to keep rates higher for longer than risk a renewed inflation rebound.