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Bank of America’s top rates strategist, Mark Cabana, warns that the Federal Reserve’s expected pause on rate cuts could disappoint bond investors. Despite market hopes for a September cut, Cabana predicts limited forward guidance from Chair Jerome Powell. The prolonged pause may have a stronger-than-anticipated impact on the bond market.
- BofA predicts the Fed will hold rates steady, contrary to bond market expectations of a September cut.
- Cabana foresees limited forward guidance from Powell, maintaining a 'wait-and-see' stance.
- BofA economists project no rate cuts in 2025, conflicting with market pricing of 45 basis points in reductions.
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