The Federal Reserve may be preparing to deliver a series of interest-rate hikes that few investors are currently expecting.
Bank of America delivered a sharp hawkish pivot on Monday, telling clients it now expects the Federal Reserve to raise interest rates by 75 basis points before the end of 2026.
The call marks a striking reversal that puts the bank well ahead of the market pricing.
The bank's economist Aditya Bhave said he sees three straight 25bp hikes in September, October and December, lifting the federal funds rate to 4.25%-4.5%.
That is about 25 basis points more, and three months earlier, than the market, which has priced in two hikes by March 2027.
