From The Economic Times · Reuters · · 1m 10s
BofA Forecasts January Fed Hike
BofA Global Research now expects a January 2027 Fed rate hike after hotter-than-expected October CPI data.
In brief
BofA Global Research now expects a January 2027 Fed rate hike after hotter-than-expected October CPI data. BofA Global Research revised its forecast to include a January 2027 Fed rate hike following hotter-than-expected October CPI data. Originally reported by The Economic Times.
BofA Global Research Update
BofA Global Research now expects the Federal Reserve to deliver an additional 25-basis-point increase in January 2027, on top of its prior forecast of hikes in December and March.
“After october cpi, the fed looks further behind the curve on inflation”
CPI Data Impact
Hotter-than-expected October CPI data boosted bets on higher borrowing costs and raised inflation expectations.
Fed Rate Context
The Fed raised its benchmark interest rate to a 3.75%-4.00% range in September, marking its first hike in three years.
BofA's Inflation View
Economists at BofA said the central bank can no longer afford to raise rates at a quarterly pace after October CPI data.
“After october cpi, the fed looks further behind the curve on inflation”
Fed Policy Outlook
Fed Governor Christopher Waller suggested a 25-basis-point hike next month and a larger increase if price pressures accelerate.
Market Reaction
Goldman Sachs and Deutsche Bank similarly revised their Fed outlooks after this week's CPI data, with Goldman now forecasting hikes in December and March.
In short
BofA Global Research revised its forecast to include a January 2027 Fed rate hike following hotter-than-expected October CPI data.
