BOFA GLOBAL RESEARCH ADDS 25 BP FED RATE HIKE IN JANUARY 2027 TO ITS FORECAST; NOW EXPECTS HIKES IN DECEMBER 2026, JANUARY AND MARCH

BofA Global Research has revised its Federal Reserve forecast to include 25 basis point rate hikes in December 2026, January 2027, and March 2027, adding a January 2027 hike to its prior outlook. The revision shifts the expected path from a holding pattern toward a tightening cycle, meaning the forecast now embeds higher policy rates earlier and for longer than before. The transmission channel runs through the rate differential: a steeper expected Fed path widens the yield advantage of dollar assets, typically supporting USD against currencies whose central banks are not tightening as aggressively. For BAC, the market impact is less direct; the bank's own equity sensitivity depends on whether higher rates lift net interest margins more than they dampen loan demand and credit quality, which makes the revision a forecast input rather than a direct earnings event. The next catalyst traders will track is the December 2026 FOMC meeting and the Fed's accompanying dot plot, which will show whether the committee's own projections align with the hike path BofA now anticipates.

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