Bank of America Projects Fed Rate Cuts Amid Weak Jobs Data

Bank of America has revised its outlook on Federal Reserve policy, now forecasting two interest rate cuts in 2025. The firm anticipates a 75-basis-point reduction, with moves expected in September and December. This shift follows August's disappointing jobs report, which showed unemployment climbing to 4.3% - the highest level since October 2021.

The labor market added just 22,000 positions last month, dramatically missing Bloomberg's consensus estimate of 75,000. "August's employment data confirms the labor market has stepped off a cliff," said Bradley Saunders of Capital Economics. The weak figures have strengthened the case for monetary easing, with BofA becoming the first major institution to predict multiple cuts.

Market observers note the Fed's reaction function appears to have shifted following Chair Powell's recent Jackson Hole remarks. While cryptocurrencies weren't mentioned in the report, traders typically view rate cuts as bullish for risk assets including Bitcoin and Ethereum. The policy pivot could improve liquidity conditions across crypto exchanges like Binance and Coinbase.