Bank of America Warns: Persistent Inflation Above Target Combined with Tariff Increases Leaves Fed with Insufficient Reasons for September Rate Cut

【Bank of America Warns: Persistent Inflation Above Target Combined with Tariff Increases Leaves Fed with Insufficient Reasons for September Rate Cut】Golden Finance reports that Bank of America, in its latest research report, points out that the Federal Reserve should restrain itself from the urge to cut rates at the September policy meeting, as recent economic data does not support an early start to the easing cycle. The bank emphasizes that the decision-makers in favor of a rate cut have underestimated the impact of labor supply shocks and the stubbornness of inflation—current inflation remains above the Fed's 2% target level. The report warns that the latest tariff increases may cause a 'more severe and lasting impact' on prices. 'If rates are cut in September, there is a risk of starting an easing cycle before inflation has peaked,' the Bank of America analysis team wrote, maintaining its baseline forecast of 'no rate cuts this year.' The bank specifically pointed out that the downward revision of U.S. non-farm payroll data increases the possibility of so-called 'passive rate cuts'—that is, rate reductions driven by a deteriorating labor market rather than effective anti-inflation measures.