Bank of America: still expects Fed to cut rates in December

Stephen Juneau, U.S. economist at Bank of America, said, ‘We still expect the Fed to cut rates in December and we think the data will be in line with expectations, but it's understandable why the market feels like it's a bit of a coin flip, the U.S. economy is still very strong and inflation is still above target. We will see deregulation, looser fiscal policy, more protectionist trade policy and stricter immigration policy. All of these pose upside risks to inflation ...... The Fed is unlikely to cut rates as sharply as we have previously considered, as they will see inflation remain above their target level.’ Bank of America is reported to have recently raised its final forecast for the federal funds rate to 3.75%-4.00%, compared to 3.00%-3.25% previously.