Bank of America Warns of Interest Rates Returning Above 5%
Qiyas summary
Bank warns against markets underestimating monetary tightening and interest rates rising above 5%
Translated by Qiyas from النهار — Original source
Bank of America warned that markets may be underestimating the extent to which U.S. monetary policy tightening could go, pointing to the possibility that the Federal Reserve’s main interest rate could rise above 5% in the new hiking cycle. The bank argued that market pricing does not fully reflect the likelihood of continued rate hikes, while interest rate swap contracts imply about three additional increases of 25 basis points each, which would place the effective interest rate in the range of 4.5% to 4.75%.
