Bank of America chief executive Brian Moynihan has reaffirmed the bank's stance that the Federal Reserve will cut interest rates three times in a row, in September, October and December of this year. Speaking on the policy outlook, Moynihan said the U.S. labor market is still holding up well, although inflation has more work to do to come down — a combination, he said, that leaves the Fed room to adjust monetary policy. He also noted that consumption trends among different income groups are now converging, which he sees as a positive sign of better economic health across the country. The bank's economics team had previously expected the Fed to kick off a rate-cutting cycle in the second half of this year. Against that backdrop, market participants are keeping a close eye on employment data, inflation momentum and consumer spending to assess how quickly the Fed might move. If the central bank delivers the anticipated sequence of cuts, financing costs could fall further, potentially offering support to equities, bonds and risk assets more broadly.
Bank of America chief executive Brian Moynihan has reiterated the bank's expectation of three consecutive rate cuts by the Federal Reserve in September, October and December this year.
Moynihan said that the U.S. labor market remains strong, but inflation still needs to move lower, leaving the Fed room to ease monetary policy. He also noted that consumption trends across different income brackets are converging, a sign that the U.S. economy is getting healthier.
The bank's economics team has previously forecast the Fed would start cutting rates in the second half of this year. Against that backdrop, markets are now watching employment data, inflation readings and consumer spending to gauge the likely pace of the Fed's moves. Three straight cuts, if delivered, would bring down financing costs and offer support to stocks, bonds and risk assets.
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