Bank of America: It's time for the Federal Reserve to stop cutting interest rates

2025-01-20 14:44:25
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ChainCatcher news, according to Jinshi reports, Bank of America stated that as the global market approaches Donald Trump's inauguration, the U.S. economy remains resilient. The previously released employment data is strong, retail sales data is also robust, and the core inflation rate is at 3.2%, still at a high level within the range. The cyclical and structural dynamics of the U.S. economy are consistent with the natural interest rate, which is quite close to the current Federal Reserve funds rate, but inflation remains stubbornly above the target. Based on this alone, the Federal Reserve has reason to end the easing cycle. The impact of Trump 2.0 in the U.S. and other parts of the world carries significant uncertainty, and protectionist policies may affect inflation expectations. More concerning is that excessive fiscal stimulus could impact the potential for economic performance. Contrary to market pricing, Bank of America believes that the Federal Reserve has completed its rate cuts.

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