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BofA Global Researchisthe latest brokeragetorevise its Federal Reserverate-cut forecastto much later dates, citing elevatedinflationdue to high energy prices and growing strength in the labor market.
BofA Global Research now expects the Fed to remain on hold for the rest of this year, with two quarter-point cuts inJuly and September 2027.
A host of global brokerages have recast their projections for Fed rate cuts in 2026, split between some easing and no cuts at all,Reutersreported.
This comes as the 11-week Iran war pushed energy prices higher and left policymakers cautious about inflation risks.
The Fed heldthe benchmark Federal Funds Rate steady at 3.50% to 3.75% at its April 29 meeting in an unusually divisive 8–4 vote, the closest since 1992.
“The data simplydon’t warrant cuts this year,” Aditya Bhave, the head of U.S.
economics at Bank of America, wrote on May 8, asBloomberg reported.
“Core inflation is too high, and moving up.
The solid April jobs report was the last straw, especially givenhawkishFedspeak.” Bhave and colleagues now expect that the Fed will not cut rates again until July 2027, a shift from their previous forecast of September 2026.
The Fed’s dual mandate from Congress requires maximum employment and stable prices.
Lower interest ratessupport hiring but can fuel inflation.
This risks fueling further inflation, potentially leading to an inflationary spiral.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | ▲ +0.34% |
| WTI Crude | $96.90/bbl | ▲ +0.21% |
| EN590 Diesel | $846/MT | ▲ +0.18% |
| Jet Fuel A-1 | $1090/MT | ▲ +0.55% |
| Mazut M100 | $450/MT | ▼ -0.15% |
| Bitumen 60/70 | $470/MT | ▲ +0.08% |
| Sulphur Gran 99.5% | $470/MT | ▼ -0.44% |
| Urea 46% Gran | $650/MT | ▲ +1.12% |
| NPK 16-16-16 | $460/MT | ▼ -0.28% |
| Nat Gas TTF | $15.42/MMBtu | ▲ +0.92% |
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