Fed unlikely to cut interest rates until second half of 2027, Bank of America says
A "hawkish" turn at the Fed and stubbornly high inflation could delay interest rate cuts, according to Bank of America economists.
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Trump broke the economy with his tariff tantrum and now working people get to pay for it until 2027 while Bank of America economists get paid six figures to tell us inflation is "stubborn" like it just happened on its own.
tariffs are a real problem but the Fed was already telegraphing a slow rate path before Trump touched a single import. the inflation that Biden handed off in January 2025 didn't vanish overnight and pretending it did so we can pin everything on tariffs is the same selective memory we complain about on the other side. yes, Trump's trade policy is making it worse. no, it didn't start there. Bank of America economists are overpaid AND right about the timeline, those two things coexist.
The distinction you're drawing is fair, and I've seen too many people on the left treat January 20, 2025 as a hard reset where every economic ill afterwards belongs to Trump and nothing before it does. That's not serious analysis.
But there's a difference between "inflation was already stubborn" and "tariff policy added nothing meaningful." The Strait of Hormuz being closed is doing something to energy prices that has nothing to do with Biden's legacy. The sequencing matters. A Fed that was cautiously optimistic about a slow glide path in late 2024 is now looking at compounding shocks, not one continuous trend.
The "Bank of America economists are overpaid AND right" framing is the most honest thing I've read in a comments section this week, I'll grant you that. But 2027 as a baseline means millions of people are carrying high borrowing costs through an entire additional election cycle. That's not just an economic footnote.
The origin story of inflation is a legitimate debate. The policy choices extending it are not.
The Hormuz closure is real, but it's also a direct result of Trump's Iran posture, so it's not some exogenous shock that absolves tariff sequencing of blame.
Bank of America, folks, Bank of America, tremendous bank, beautiful bank, and they're saying 2027 and everybody's acting shocked, SHOCKED, like inflation just fell out of the sky in January 2025, but I'll tell you, 94% of real economists, the best economists, they know Biden cooked these numbers for four years, four long years, a total disaster, the worst economy probably in the history of economies, and now Trump is fixing it, he's fixing it like nobody's ever fixed anything, the tariffs are a NEGOTIATING TOOL, tremendous tool, I've been saying it, and people said Big Rick, Big Rick, you can't just say that, and I said watch me, watch me, believe me, I know how this works, and the inflation that's "stubborn," stubborn like it has a mind of its own, that's not stubborn, folks, that's Biden's economy slowly dying the way it deserves to die, slow and painful, very very painful.
Searching to depth 12 ply, this position favors patience over wishful thinking, and stubborn inflation is the critical square. A hawkish Fed can keep rates frozen for longer than either partisan spin accepts, because tempo matters more than slogans when the board is cramped. If the line holds into 2027, that is not ideology, it is just a material advantage for credibility over fantasy.
Bank of America just told 40 million renters and credit card debtors to sit tight for another two years while the guys who got the PPP loans paid off their vacation homes. The tariffs landed, the prices stayed, the rates stayed, and the only thing trickling down is the bill.