{"id":7008,"date":"2025-08-04T13:03:21","date_gmt":"2025-08-04T13:03:21","guid":{"rendered":"https:\/\/otetmarkets.com\/blog\/?p=7008"},"modified":"2025-08-04T13:03:21","modified_gmt":"2025-08-04T13:03:21","slug":"fed-no-rate-cut-2025-bofa","status":"publish","type":"post","link":"https:\/\/otetmarkets.com\/blog\/news\/fed-no-rate-cut-2025-bofa\/","title":{"rendered":"BofA Securities Reaffirms No Fed Rate Cuts in 2025 Despite Soft Jobs Data"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-key-takeaways\"><strong>\u2705Key Takeaways<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>BofA Securities sticks with forecast: no Fed rate cuts in 2025<\/li>\n\n\n\n<li>July jobs report weaker than expected, with steep downward revisions for May and June<\/li>\n\n\n\n<li>Fed Chair Powell likely to tolerate weak job growth if unemployment remains stable<\/li>\n\n\n\n<li>Inflation remains stubbornly above the Fed\u2019s 2% target, limiting rate cut prospects<\/li>\n\n\n\n<li>Immigration restrictions tighten labor supply despite weakening demand<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-video\">\n  <a href=\"https:\/\/otetmarkets.com\/prblog\" target=\"_blank\">\n    <video height=\"500\" style=\"aspect-ratio: 1312 \/ 500;\" width=\"1312\" autoplay loop muted playsinline>\n      <source src=\"https:\/\/otetmarkets.com\/blog\/wp-content\/uploads\/2025\/04\/Otet-Banner-en-2.mp4\" type=\"video\/mp4\">\n      Your browser does not support the video tag.\n    <\/video>\n  <\/a>\n<\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-bofa-securities-maintains-fed-will-hold-rates-in-2025\"><br><strong>BofA Securities Maintains Fed Will Hold Rates in 2025<\/strong><\/h2>\n\n\n\n<p>Bank of America Securities (BofA) has reaffirmed its expectation that the <strong>Federal Reserve will not cut interest rates in 2025<\/strong>, despite growing market speculation for a rate cut as early as September. This comes after the July jobs report showed the U.S. labor market added fewer jobs than forecast.<\/p>\n\n\n\n<p>The <strong>U.S. Bureau of Labor Statistics\u2019 data<\/strong> revealed deep downward revisions for payrolls in May and June, signaling the labor market\u2019s resilience may have been overstated amid tariff-driven trade tensions earlier this year.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-labor-market-weakness-challenges-rate-cut-expectations\"><br>\ud83d\udca1<strong>Labor Market Weakness Challenges Rate Cut Expectations<\/strong><\/h3>\n\n\n\n<p>Analysts at BofA, led by Aditya Bhave, acknowledge that the disappointing payroll data challenges their outlook. They admit the probability of \u201cbad cuts\u201d, rate reductions caused by labor market deterioration, has increased. However, they emphasize they remain committed to their original call of <strong>no interest rate cuts in 2025<\/strong> for now.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cMarkets are conflating recession with stagflation, a scenario of high inflation alongside weak economic growth,\u201d BofA said.<\/p>\n<\/blockquote>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-immigration-and-inflation-are-key-factors\"><br><strong>Immigration and Inflation Are Key Factors<\/strong><\/h2>\n\n\n\n<p>BofA analysts highlight how immigration restrictions have significantly reduced the <strong>foreign-born workforce<\/strong> by 802,000 since April, tightening labor supply. Despite weakening job demand, slack in the labor market has not increased, with the unemployment rate and job vacancy ratio remaining stable over the past year.<\/p>\n\n\n\n<p>Meanwhile, wage growth and aggregate labor income remain robust, adding complexity to the Fed\u2019s policy decisions.<\/p>\n\n\n\n<p>Fed Chair Jerome Powell has indicated a willingness to \u201clook through weak job growth\u201d if unemployment remains \u201crange bound.\u201d<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><strong>Read More: <a href=\"https:\/\/otetmarkets.com\/blog\/news\/july-jobs-report-and-trump-tariffs\/\" target=\"_blank\" rel=\"noreferrer noopener\">Weak Jobs Report and Trump\u2019s New Tariffs Shake Global Markets<\/a><\/strong><\/p>\n<\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-inflation-remains-the-fed-s-primary-concern\"><br><strong>Inflation Remains the Fed\u2019s Primary Concern<\/strong><\/h3>\n\n\n\n<p>Inflation stubbornly above the Fed\u2019s <strong>2% target<\/strong> remains the major hurdle for rate cuts. The Fed\u2019s current &#8220;wait-and-see&#8221; stance stems from cautiousness around inflation trends rather than labor market weakness.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cIf the Fed cut rates in September, it would be betting heavily on labor market deterioration without evidence that inflation has peaked,\u201d BofA warned.<\/p>\n<\/blockquote>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-employment-and-inflation-snapshot\"><br><strong>\u2705Employment and Inflation Snapshot<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Month<\/th><th>Jobs Added (Thousands)<\/th><th>Unemployment Rate (%)<\/th><th>Inflation Rate (%)<\/th><th>Fed Rate Outlook<\/th><\/tr><\/thead><tbody><tr><td>May 2025<\/td><td>Revised down by 125K<\/td><td>4.2<\/td><td>Above 2%<\/td><td>No cuts expected<\/td><\/tr><tr><td>June 2025<\/td><td>Revised down to 14K<\/td><td>4.2<\/td><td>Above 2%<\/td><td>Cautious stance<\/td><\/tr><tr><td>July 2025<\/td><td>73K<\/td><td>4.2<\/td><td>Above 2%<\/td><td>No cuts likely<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-conclusion\"><strong> <\/strong><br><strong>\ud83d\udcacConclusion<\/strong><\/h2>\n\n\n\n<p>While July\u2019s soft jobs data and payroll revisions have sparked speculation about potential Fed rate cuts, BofA Securities remains cautious, emphasizing persistent inflation and tight labor supply as key reasons the Fed will likely keep rates steady in 2025.<\/p>\n\n\n\n<p><strong>\ud83d\udd0e What are your thoughts on the Fed\u2019s policy direction? Do you expect rate cuts soon? Share your opinions below or spread the word by sharing this article!<\/strong><\/p>\n\n\n\n<p><a href=\"https:\/\/www.investing.com\/news\/economy-news\/bofa-backs-prediction-that-the-fed-will-keep-rates-steady-despite-soft-jobs-data-4167630\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u2705Key Takeaways BofA Securities Maintains Fed Will Hold Rates in 2025 Bank of America Securities (BofA) has reaffirmed its expectation that the Federal Reserve will not cut interest rates in 2025, despite growing market speculation for a rate cut as early as September. This comes after the July jobs report showed the U.S. labor market [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":7013,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,2],"tags":[37],"class_list":["post-7008","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-global-economy-news","category-news","tag-financialnews"],"_links":{"self":[{"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/7008","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/comments?post=7008"}],"version-history":[{"count":1,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/7008\/revisions"}],"predecessor-version":[{"id":7015,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/7008\/revisions\/7015"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/media\/7013"}],"wp:attachment":[{"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/media?parent=7008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/categories?post=7008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/otetmarkets.com\/blog\/wp-json\/wp\/v2\/tags?post=7008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}