grant President Donald Trump Because of the open dissatisfaction with former Chairman Jerome Powell, there were relatively widespread expectations that his successor – Chairman Kevin Warsh – would herald a more dovish Fed.
However, the latest figures on the US economy have led to a sudden and sharp shift in mood Bank of America (New York Stock Exchange: Buck) now expects additional interest rate increases in 2026.
Specifically, BofA Global Research revealed on Monday, June 22, that it now expects the federal funds rate to rise by 75 basis points (BPS) before the end of the year. The change will occur across three meetings: in September, October and November.
According to the analysis, this forecast, which goes against the Street consensus, is a result of Warsh’s comments at the end of the recent Federal Open Market Committee (FOMC) meeting and continued economic resilience, as evidenced by employment data.
It is worth noting that the inflation rate has also remained well above target for years, which has prompted some critics of the US central bank To guess That the institution has given up on price stability.
Looking ahead, Bank of America also believes the Fed will keep interest rates steady in 2027.
Is Fed Chairman Warsh about to challenge President Trump?
Elsewhere, if the Fed chooses to raise interest rates and keep them high over a longer time frame, that would be a sign that the institution retains its independence.
President Donald Trump had previously strongly criticized former President Jerome Powell for not lowering interest rates faster in hopes of stimulating the economy. Markets And made religion Service to USA is cheaper.
Combined with doubts about Warsh’s ability to resist the commander-in-chief, the dispute led to… Criminal investigation to the former Chairman of the Federal Reserve over an expensive renovation project, and harsh criticism from senior bankers like Janet Yellen.
Yellen – who served as Fed chair between 2014 and 2018 and then as Treasury secretary under President Joe Biden – criticize President Trump advocates lowering interest rates as something akin to “banana republic” behavior.
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