Bank of America anticipates the U.S. Federal Reserve will raise interest rates three times in 2026. This projection contrasts with the Fed's current pause, maintaining the target range steady since June. This outlook aligns with recent hawkish signals from Fed officials regarding monetary policy. While nine out of 19 Fed policymakers forecasted at least one rate hike by the end of 2026, Bank of America indicates a more assertive stance.
Market pricing reflects an 80.4% likelihood of no rate cuts in 2026, suggesting that the Fed's policy may support economic tightening. Investors will closely watch upcoming Federal Open Market Committee meetings and statements from Fed Chair Jerome Powell for insights on future rate decisions.