One point that might bring the Federal Reserve and the recently-minted Trump administration into conflict going forward is a stance over interest rates. And banking giant Bank of America (BAC) weighed in as well on where those were going. Its response was not particularly welcome news to shareholders, who sent Bank of America shares down over 1.5% in Wednesday afternoon’s trading.
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Basically, Bank of America looks for no cuts in interest rates, mostly because consumer spending is still rolling along. That in turn would mean that the Federal Reserve would likely not bother to cut interest rates either. In fact, Bank of America noted that customers are spending about 6% more money this year so far than they did at the same time last year.
Yet, interestingly, Bank of America also noted that the ongoing high inflation makes it unlikely any interest rate cuts will be seen. Both “price firmness” and “demand firmness” are in place, which means that, apparently, rate firmness will also be in play.
Meanwhile In Switzerland
Bank of America is also facing some mounting issues in Switzerland, as the regulatory landscape is getting a lot more forbidding. To that end, Bank of America is bringing in a whole new roster to its banking team, fully doubling its size in the country in a bid to take on increasing regulatory oversight provisions.
Switzerland promised tighter banking restrictions since the loss of Credit Suisse back in 2023, starting with requirements for more capital on hand to prevent such collapses from happening in the future. While there was some concern that the new requirements could ultimately weaken banks in Switzerland, this does not seem to be slowing down the Swiss government’s plans to tighten up. In fact, reports noted, there will likely not be “…much clarity until May” on the overall impact of these moves.
Is BAC a Good Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BAC stock based on 18 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 44.18% rally in its share price over the past year, the average BAC price target of $52.86 per share implies 14.32% upside potential.
