{"id":74448,"date":"2026-06-23T17:10:42","date_gmt":"2026-06-23T17:10:42","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/feds-inflation-problem-unambiguously-worse-as-it-forecasts-3-rate-hikes-in-2026\/"},"modified":"2026-06-23T17:10:42","modified_gmt":"2026-06-23T17:10:42","slug":"feds-inflation-problem-unambiguously-worse-as-it-forecasts-3-rate-hikes-in-2026","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/feds-inflation-problem-unambiguously-worse-as-it-forecasts-3-rate-hikes-in-2026\/","title":{"rendered":"Fed&#8217;s Inflation Problem &#8216;Unambiguously Worse&#8217; as It Forecasts 3 Rate Hikes in 2026"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<p><span style=\"font-weight:400\"><\/p>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Bank of America forecasts three 25-basis-point Fed hikes in September, October, and December of this year.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">BofA Economist Aditya Bhave believes the Fed\u2019s inflation problem has gotten \u201cunambiguously worse\u201d over the last couple of years.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">The projected hikes would lift the federal funds rate to 4.25%-4.5%, a headwind for crypto.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<p><\/span><\/p>\n<h2><span style=\"font-weight:400\">A Sharp Reversal<\/span><\/h2>\n<p><span style=\"font-weight:400\">Bank of America\u2019s economics team made the hawkish call this week, abandoning a forecast it had held as recently as the prior week that the Fed would leave rates unchanged through 2026. The bank now sees three consecutive quarter-point increases at the September, October, and December meetings, which would lift the federal funds rate to a range of 4.25% to 4.5%.<\/span><\/p>\n<figure id=\"attachment_825466\" aria-describedby=\"caption-attachment-825466\" style=\"width:1222px\" class=\"wp-caption aligncenter\"><figcaption id=\"caption-attachment-825466\" class=\"wp-caption-text\">Image source: X<\/figcaption><\/figure>\n<p><span style=\"font-weight:400\">The driver, the bank said, is an <span>inflation<\/span> backdrop that has deteriorated under new Fed Chair Kevin Warsh, with BofA economist Aditya Bhave putting things as bluntly as possible:<\/span><\/p>\n<blockquote>\n<p>\u201cThe Fed\u2019s <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-is-inflation\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">inflation<\/a> problem has gotten unambiguously worse. Core PCE could reach 3.5% in May, nearly 70bp higher than it was a year ago. The pickup has been partly due to tariffs and other one-offs. The Fed was willing to look through the tariffs, but it is losing patience after the latest round of supply shocks.<\/p>\n<\/blockquote>\n<p>He further added that housing-driven disinflation has now mostly run its course, even though other core services remain \u201cvery sticky.\u201d<\/p>\n<h2><span style=\"font-weight:400\">Inflation That Won\u2019t Quit<\/span><\/h2>\n<p><span style=\"font-weight:400\">BofA has argued that the disinflation that helped cool prices in prior years has largely run its course. \u201cHousing-driven disinflation has now mostly run its course, while other core services remain very sticky,\u201d Bhave subsequently wrote, pointing to the persistent price pressures that have frustrated policymakers.<\/span><\/p>\n<p><span style=\"font-weight:400\">The new Fed leadership has signaled it shares those concerns and following his first meeting as chair, Warsh referred to the importance of \u201c<\/span><span style=\"font-weight:400\">price stability<\/span><span style=\"font-weight:400\">\u201d roughly a dozen times, a repetition markets read as a clear hawkish signal. At that June 17 meeting, the Federal Open Market Committee (FOMC) <\/span><a href=\"https:\/\/www.cnn.com\/2026\/06\/17\/economy\/fed-rate-decision-june-kevin-warsh\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight:400\">held the benchmark rate<\/span><\/a><span style=\"font-weight:400\"> at 3.5% to 3.75% but flagged that further increases could be warranted.<\/span><\/p>\n<p><span style=\"font-weight:400\">Energy costs tied to the Iran war have added to the pressure, and roughly half of Fed officials have now indicated that rate increases could be appropriate in 2026. Bank of America\u2019s call effectively bets that the hawks will win the internal debate.<\/span><\/p>\n<p><span style=\"font-weight:400\">Lastly, higher interest rates are generally a headwind for <a href=\"https:\/\/www.binance.com\/en\/price\/bitcoin\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">bitcoin<\/a> and other digital assets because when safe-haven yields rise, investors have less incentive to hold non-yielding, higher- <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-is-volatility\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">volatility<\/a> assets, and <a href=\"http:\/\/www.bitcoin.com\/get-started\/what-is-liquidity\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">liquidity<\/a> tends to drain from speculative markets. That said, n<\/span><span style=\"font-weight:400\">ot everyone agrees with the three-hike call, with some analysts questioning whether the Fed will move that aggressively given the risk to growth and employment. <\/span><\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/bank-of-america-three-fed-rate-hikes-2026\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Key Takeaways Bank of America forecasts three 25-basis-point Fed hikes in September, October, and December of this year. BofA Economist Aditya Bhave believes the Fed\u2019s inflation problem has gotten \u201cunambiguously worse\u201d over the last couple of years. The projected hikes would lift the federal funds rate to 4.25%-4.5%, [&hellip;]<\/p>\n","protected":false},"author":3947362404,"featured_media":74449,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/74448"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362404"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=74448"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/74448\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/74449"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=74448"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=74448"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=74448"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}