New York, Jan 28, 2026, 15:36 EST — Regular session
Bank of America shares slipped 1.2% to $51.52 in Wednesday’s afternoon session, reacting as investors absorbed the Federal Reserve’s decision to hold U.S. interest rates steady. The Fed kept its policy rate between 3.50% and 3.75%, giving little indication on the timing of the next rate cut. (Reuters)
Why it matters now: major U.S. banks are priced on bets around rate cuts, since borrowing costs directly affect net interest income — the difference between loan earnings and deposit expenses. Futures markets have scaled back 2026 easing expectations to roughly 44 basis points, pushing the next cut out to July at the earliest. This shift can quickly shake up bank valuations. (Reuters)
Some economists highlight stronger loan demand as a reason the Fed might hold off on rate cuts. “Growth is strong, the unemployment rate is fine, and inflation is high. Why cut?” said Natixis economist Christopher Hodge. (Reuters)
Bank of America told staff it plans to match the U.S. government’s one-time $1,000 contribution to the new “Trump Accounts” for qualifying employees’ children, according to an internal memo reviewed by Reuters. The initiative would grant $1,000 in seed funding for kids born from 2025 to 2028, invested in low-cost index funds that grow tax-deferred — meaning taxes are paid upon withdrawal. BofA also said it will permit pre-tax payroll contributions within government limits. (Reuters)
In Europe, the bank named Vito Lo Piccolo as its new country executive for Italy, taking over from Nino Mattarella, who is stepping down, according to an internal memo. Lo Piccolo will operate out of Milan and report directly to Bernie Mensah, the bank’s president of international, the memo added. (Reuters)
The broader market showed nerves without a clear trend. The S&P 500 touched 7,000 briefly before pulling back, as investors awaited Chair Jerome Powell’s remarks and a flood of megacap earnings after the close. “The Fed didn’t rock the boat,” noted Ryan Detrick, chief market strategist at Carson Group. (Reuters)
JPMorgan Chase edged up in afternoon trading, but Wells Fargo and Citigroup slipped, showing a mixed reaction to the Fed’s latest move within the sector.
Still, the stock remains vulnerable to the same forces that unsettle traders: a steep fall in market rates cutting into interest income, or an economic shift prompting banks to boost loan loss provisions. Political and regulatory news can stir volatility as well, even if the core figures stay steady.
On the macro front, the Fed is holding steady, buoyed by resilient data—unemployment hovers near 4.4%, while inflation still sits above the 2% target. As of last month, policymakers’ median forecast calls for just a single quarter-point rate cut in 2026. (Reuters)
Bank of America’s next major event comes Feb. 10, when CEO Brian Moynihan takes the stage at the BofA Securities Financial Services Conference. Investors will be tuning in closely for any changes in his comments on loan growth, deposits, and the interest rate outlook. (Bankofamerica)
