BofA sees December hikes as a possible end to the tightening cycle
BofA strategist Michael Hartnett says a series of December rate increases could close the tightening cycle and open room for a year-end rally in risk assets.
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what happened
Bank of America strategist Michael Hartnett, as reported by Seeking Alpha, argues that a wave of December hikes by central banks may be the last phase of the current tightening cycle. The bank puts the chance of a Federal Reserve move on Dec. 9 at 64%, a European Central Bank increase on Dec. 17 at 76%, a Bank of England hike at 50%, and a Bank of Japan increase on Dec. 18 at 68%.
BofA counts 55 hikes delivered or expected this year, up from 11 it had forecast back in January. If November inflation and US jobs figures come in softer than expected, the December decisions could be the final ones, supporting a rebound in risk assets toward year-end and a “Goldilocks” outlook for 2027. The bank will stay defensive until tightening ends, the 10-year Treasury yield drops under 4.5%, and crude falls below $80 a barrel.
why it matters
The key question for investors is whether monetary tightening ends before credit stress or a recession takes hold. Upcoming US inflation and labor market releases will be the main signals for whether sentiment shifts.
market impact
US stocks and Treasuries: whether December hikes mark the last step shapes risk appetite and yields
tags
instruments
sources
- December rate hikes could mark turning point for markets — Seeking Alpha, 6 November 2026 at 16:35 UTC
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