US Fed to Raise Rates Twice More in 2026, Says Bank of America - Morningstar

Bank of America expects the US Federal Reserve to raise interest rates twice more in 2026, according to reporting by Morningstar. The forecast implies that the central bank's easing cycle may give way to renewed tightening, a shift that would mark a notable turn in the policy path markets have been pricing over the past year.

The relevance lies in what rate expectations feed into. Higher policy rates typically transmit through Treasury yields, borrowing costs for households and businesses, and the discount rates used to value equities. For investors, the key variable is not only the number of hikes but the reasoning behind them—whether they reflect persistent inflation, resilient growth, or both—since that distinction shapes how different asset classes respond.

What to watch: the Fed's own projections and commentary at upcoming meetings, incoming inflation and labor-market data, and whether other forecasters converge on or diverge from Bank of America's view. Forecasts of this kind are estimates, not commitments, and can be revised as conditions change.