According to Bank of America’s Global Research division on May 8, the Federal Reserve will postpone interest rate cuts until the second half of 2027, citing elevated inflation and strong employment growth. BAC previously forecast two rate cuts in September and October 2026, but has now reversed that view. The bank’s economists stated they no longer expect rate cuts this year, citing multiple economic headwinds including the Iran conflict, tariffs, and artificial intelligence developments that complicate rate forecasts.
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Powell holds a press conference tomorrow morning—keeping interest rates unchanged is not a foregone conclusion. What should the next Federal Reserve decision focus on?