Bank of America Sees Fed Rate Hikes: Three In 2026
Bank of America expects Fed rate hikes totaling 75 bps this year, shifting from its prior view of no moves in 2026. The bank projects rate hikes scheduled for September, October, and December, which would lift the federal funds target range to 4.25%–4.50%. This revised forecast looks more aggressive than before and broadly matches the Fed’s June 2026 guidance, where the median year-end estimate already leaned toward at least one increase.
For traders, the key near-term trigger is confirmation at upcoming Fed meetings in September, October, and December. Market pricing appears to be adjusting as odds move in related prediction markets. Watching inflation and employment data will be critical, since they could change the Fed path.
Overall, the Fed rate hikes outlook may increase volatility across risk assets, including crypto, as higher-for-longer rates can tighten financial conditions. With markets already repricing, upside and downside moves in BTC and ETH could both be sharper than usual around key data and FOMC decision dates. Fed rate hikes remain the central variable for positioning over the next several months.
Bearish
Bank of America’s expectation of three Fed rate hikes (75 bps total) points to a tighter policy stance and likely “higher-for-longer” financial conditions. Historically, when markets start to price more aggressive Fed tightening, crypto tends to face near-term headwinds because higher yields and tighter liquidity can reduce appetite for high-duration, risk assets.
In the short term, traders may react by de-risking around FOMC dates, because the probability of additional hikes (Sep/Oct/Dec) raises volatility and can strengthen the USD and risk-free yields—often a headwind for BTC/ETH. In the long term, if inflation and employment data ultimately force the Fed to stay restrictive, crypto liquidity conditions may remain less favorable, limiting sustained rallies.
That said, the impact can become “less bearish” if subsequent data show disinflation or weakening labor markets, allowing traders to unwind tightening expectations. Still, with market pricing already moving and this being among the more aggressive forecasts, the base case leans bearish for near-term market stability.