BofA Scraps Fed Call on Jobs Data, Sees Two Cuts This Year (1)

Economists at Bank of America Corp. forecast two Federal Reserve interest-rate cuts this year — in September and December — based on weak August employment data, scrapping what had become an outlier call for no action until next year.

“There is now clearer evidence of deterioration in labor demand, not just supply,” Aditya Bhave said in a report. The new forecast also includes three quarter-point cuts in 2026 beginning in June, bringing the target range for the policy rate to 3%-3.25% from 4.25%-4.5%.

US inflation as measured by the core personal consumption expenditures gauge is likely to reach 3% in ...