BofA CEO Moynihan Forecasts Three Fed Rate Hikes in September, November, December

Bank of America CEO Brian Moynihan forecasts the Federal Reserve will raise interest rates three times in September, November, and December to control inflation. In a CNBC interview on the 5th, Moynihan stated the Fed could adjust its outlook if inflation data continues to come in better than expected, as seen last month, but currently believes three hikes will be sufficient to manage inflation. He projects US inflation will decline to the mid-2% range by the end of 2027 before reaching the Fed's long-term 2% target, noting that inflationary pressures across the economy had eased before rising again due to tariffs and war-related price increases, though these pressures are now subsiding again.

Moynihan Projects Inflation Path to 2% Target by 2027

Moynihan explained that inflation pressures appearing across the economy had shown signs of easing before rising again due to the impact of tariffs and war-related price increases. He added that these pressures are declining again. The BofA CEO anticipates the US inflation rate will fall to the mid-2% range by the end of 2027 and subsequently reach the Fed's long-term target of 2%.

Moynihan noted the Fed retains flexibility to modify its rate path if incoming inflation data proves more favorable than market expectations, similar to trends observed last month. However, he emphasized that under current conditions, the Fed appears confident that three rate increases will enable adequate inflation control.

June PCE Data Shows 3.7% Annual Increase

According to data released last week by the US Commerce Department, the Personal Consumption Expenditures price index—the Fed's preferred inflation gauge—rose 3.7% year-over-year in June. The core PCE price index, which excludes volatile food and energy components, increased 3.3% year-over-year in June and rose 0.1% month-over-month.

Rate Hikes Won't Derail AI Infrastructure Funding

Moynihan projected that rate increases will not significantly affect short-term financing for companies building artificial intelligence infrastructure. He stated that given the high profitability of data center construction investments, companies will be able to absorb the cost burden from rising long-term bond rates.

FAQ

What did BofA CEO Moynihan forecast about Fed rate hikes?

Brian Moynihan forecasts the Federal Reserve will raise interest rates three times in September, November, and December. He stated in a CNBC interview on the 5th that the Fed currently believes three hikes will be sufficient to control inflation, though the outlook could change if inflation data continues to improve beyond expectations.

When does Moynihan expect US inflation to reach the Fed's 2% target?

Moynihan projects US inflation will decline to the mid-2% range by the end of 2027 and subsequently reach the Fed's long-term target of 2%. He noted that inflationary pressures had eased before rising again due to tariffs and war-related price increases, but these pressures are now subsiding again.