Bank of America Forecasts 1.5% U.S. Growth in 2025 With No Fed Rate Cuts

Bank of America has forecasted a 1.5% economic growth in the U.S. for 2025, with no Federal Reserve rate cuts expected before next year. This prediction was made by the bank's CEO, Brian Moynihan, during an earnings call, where he highlighted the positive market conditions that have led to increased corporate and retail spending.

Moynihan's remarks were met with optimism from various industries and corporate leaders, who saw the projection as a sign of steady economic growth. This outlook has helped to alleviate fears of an economic downturn and has been attributed to enhanced economic planning. The expectation of stable rates has also boosted market confidence, particularly among institutional investors who may see this as an opportunity to pursue risk assets.

Recent trade agreements and favorable tax legislation have further bolstered economic optimism, leading to strategic adjustments among consumers and businesses. The bank's globally leading research team has continued to predict that the U.S. will not experience an economic recession, with the economy growing modestly by the end of the year.

The rising sentiment towards Bitcoin aligns with the predicted economic stability. During soft-landing scenarios, Bitcoin has often mirrored positive sentiment from institutional stability, leading to notable price increases. The asset’s dominance stands at 62.22% in a resilient market, highlighting its resilience. Institutional sentiment typically favors risk assets during such projections, with historically increased activity in DeFi protocols and major cryptocurrencies. Regulatory anticipation coupled with economic stability supports market growth, enhancing potential innovation in financial technologies.

Bank of America's projections for net interest income (NII) to reach $15.5–15.7 billion by year-end reflect the bank's confidence in its financial performance, despite the absence of Fed rate cuts. This resilience is attributed to the bank's focus on balance and strategic planning. The bank's traders have also posted strong results, benefiting from volatile markets and robust lending activities.

In summary, Bank of America's forecast of 1.5% economic growth and no Fed rate cuts until next year reflects a cautious approach to monetary policy. This outlook is designed to maintain economic stability, manage inflation, and navigate external challenges, ensuring a steady path forward for the U.S. economy. The bank's projections reflect a measured and strategic outlook, aimed at supporting long-term economic growth and financial stability.