US Federal Reserve Interest Rate Decision: No Rate Cut Expected This Year, Inflation and Employment Support Stable Rates

BlockBeats News, May 9th. The latest forecast from Bank of America suggests that the Federal Reserve will delay interest rate cuts until the second half of 2027, citing high inflation levels and strong job growth as the main reasons. Bank of America's global research department had previously anticipated two rate cuts by the Fed in September and October of this year. This view was based on the expectation that President Trump would nominate Kevin Warsh to replace Powell as Fed Chair, with Warsh likely to guide policymakers towards a more accommodative monetary policy. However, due to changing economic conditions, this view has now shifted.

The latest commentary from BofA economists states, "We no longer expect the Fed to cut rates this year." They also point out that multiple impactful factors on the economy, including the Iran conflict, tariffs, and the rise of artificial intelligence, have made predicting rate movements more challenging.

In Federal Reserve interest rate decisions, greater divergence often tends to prolong the maintenance of the rate. At the recent April 2026 FOMC meeting, the Fed achieved its largest divergence since 1992 with an 8-4 voting result. The increased difficulty in reaching a consensus on rate adjustments has paradoxically led to a "pause" in policy at the current level for a longer period, waiting for more data to resolve uncertainty.