BofA Global Research said on Monday that it expects the US Federal Reserve to make four rate cuts of 25 basis points next year, starting in March.
With this, BofA increased its expected total rate cut for next year to 100 basis points from 75 basis points, with the central bank expected to lower rates as early as March, June, September, and December.
It also raised its forecast for the country's economic growth on an average quarterly basis by 0.6 percentage points from 1.2% for next year, driven by stronger consumer spending.
"The latest data shows that the US economy can record moderate growth and deflation at the same time," said Michael Gapen, BofA's US economist.
The Fed's dovish turn at its policy meeting in December led to progress on the timing of the central bank's first rate cut, Gapen added.
A number of Wall Street brokers last week raised their expectations about the timing of the first interest rate cut after Federal Reserve Chairman Jerome Powell indicated a possible end to monetary policy tightening that began in March 2022.
