BofA’s Cabana: Too soon to declare end of Fed’s rate hikes in 2026

Photo: Gonzalo Facello / Pexels Mark Cabana from Bank of America has stated that it is too early to declare the Federal Reserve’s rate-hiking cycle complete, suggesting that more than three additional hikes might be necessary. This assertion aligns with ongoing concerns about inflation, which remains above the Fed’s target despite a recent pause in rate adjustments. The federal-funds rate is currently targeted at 3.75% to 4.00%, with an effective rate of 3.88% as of early November 2026. Market activity indicates a mixed outlook on whether the Fed will implement further hikes within the year, with some sub-markets reflecting varied probabilities. Key Takeaways Cabana’s statement appears consistent with the possibility of further Fed rate hikes in 2026, supporting the need for ongoing tightening. Markets suggest that while a single rate hike in 2026 is perceived as probable, the likelihood of multiple hikes remains uncertain. The Fed’s decision-making may continue to be influenced by evolving inflation data and economic indicators. What to Watch Market participants will closely monitor upcoming Federal Open Market Committee (FOMC) meetings and statements from key policymakers, such a...