Bank of America: Still expects the Fed to cut interest rates in December

Stephen Juneau, U.S. economist at Bank of America, said, "We still expect the Fed to cut interest rates in December. We think the data will meet expectations, but it is understandable why the market feels that this is a bit like a coin toss. The U.S. economy is still very strong and inflation is still above target. We will see deregulation, looser fiscal policy, more protectionist trade policy and stricter immigration policy. All of these will pose upside risks to inflation... The Fed is unlikely to cut interest rates as much as we previously considered because they will see inflation continue to be above their target level." It is reported that Bank of America recently raised its final forecast for the federal funds rate to 3.75%-4.00%, from 3.00%-3.25%. (Jinshi)