Bank of America Expects Fed to Raise Interest Rate to 6%

Bank of America Global Research recently stated in a note that they anticipate the Federal Reserve raising interest rates to 6%. Not just for the US but for other countries throughout the world as well, rising inflation has been a worrying problem. Global central banks have been working hard to contain rising inflation and avert the threat of a recession.

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The Fed has been boosting Interest Rates to bring inflation under control. However, the recent speculation by Bank of America is higher than the earlier expected interest rate of 5.4% by traders.

Bank of America says strong US consumer demand will force interest rate hike

According to Bank of America, the possibility of a rise in interest rates is likely due to strong US consumer demand and a tight labor market. The bank also mentioned that it could possibly push the central bank to fight to reduce inflation for a longer period of time.

“Aggregate demand needs to weaken significantly for inflation to return to the Fed’s target. Further supply-chain normalization and a slowdown in the labor market will help, but only to a degree,” said Bank of America on Feb. 27.

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JPMorgan CEO Jamie Dimon also mentioned last month that interest rates could rise above 5%. 

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