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If June Inflation Report Is 'Another Confidence Builder,' Fed Rate Cut Will Come Next: Bank Of America

One of the most hawkish investment firms on Wall Street might soon revise its estimates and anticipate an earlier rate cut from the Federal Reserve if June’s new inflation figures confirm another unmistakable signal of a return towards the 2% target. Despite recent benign inflation reports, Bank of America still maintains its call for rate cuts to begin no earlier than December 2024. This stance, which contrasts sharply with the current market pricing seeing a 76% chance of cuts starting as early as September, may be softened after the upcoming Consumer Price Index (CPI) report on Thursday. “We expect the June CPI report to be another confidence builder following the undeniably good May report,” wrote economist Michael Gapen in a recent note. June CPI Projections Bank of America forecasts the headline CPI to have risen by 0.1% month-over-month, partly due to another drop in energy prices. This would result in the year-over-year rate falling by a tenth to 3.2%. Analysts expect core CPI to ...