Bank of America forecasts three Federal Reserve rate hikes in 2024 under new Chair Kevin Warsh

Bank of America (BAC) now expects the Federal Reserve to raise its benchmark rate three times this year under new Chair Kevin Warsh, with the first hike likely in July and the next in September and December. The bank argues that core personal consumption expenditures inflation is running at about 3.5% and that price pressures remain too strong for a pause, so no rate cuts are projected until 2028.

The forecast signals tighter monetary conditions for both U.S. and international markets. Higher rates are expected to raise borrowing costs for households and businesses, pressuring mortgages, credit cards, corporate debt servicing and investment plans. Stronger U.S. rates could also bolster the dollar, creating financing challenges for emerging economies with dollar‑denominated debt. Investors are likely to adjust asset allocations as bond yields rise and equity valuations, especially in rate‑sensitive sectors like technology, face downward pressure.