New York, June 23, 2026, 17:16 (EDT)
Bank of America shares finished at a new record close of $57.91 on Tuesday, gaining 0.94%. That beat Monday’s record close of $57.37. The S&P 500 slipped 1.44%. The Financial Select Sector SPDR fund added 0.30%.
Bank of America’s economists made a notable pivot toward higher U.S. interest rates, splitting moves in the banks. The stock has added 3.0% in the last two sessions. JPMorgan was up roughly 0.8% Tuesday. Citigroup fell around 0.4%.
BofA Global Research sees the Federal Reserve hiking rates by 25 basis points in each of September, October, and December. A basis point equals one-hundredth of a percentage point. Its call for a 75-basis-point increase is the most hawkish among large global brokerages, while markets on Monday had about 41 basis points in.
BofA economist Aditya Bhave said, “The data call for hikes.” Bhave pointed out that inflation has “gotten unambiguously worse” and the labor market has firmed. Interactive Brokers
The research call wasn’t management guidance. Bank of America’s filings spell out the stock’s rate risk: a parallel 100-basis-point drop below the March 31 forward rate curve would hit net interest income by $2 billion over 12 months. Net interest income, or NII, tracks the difference between interest earned and what’s paid out. That $2 billion is about 3.2% of a simple annualized run rate using first-quarter NII of $15.7 billion. The consumer bank paid an average 0.51% rate on $950.8 billion in deposits.
The bank’s low deposit rate could help profits if returns on loans and securities jump faster than funding costs. But the bank’s disclosure is about what happens if rates stay low. It doesn’t mean that 75 basis points worth of Fed hikes adds $1.5 billion. The final impact would depend on deposit pricing, how hedges work, and what happens with the yield curve.
Citi bumped its Bank of America price target up to $66 from $62 Tuesday. That points to around 14% upside from the last close. The record was reached on light volume. About 29.8 million shares traded, or 81% of the 65-day average.
Fed to release annual stress-test results for 32 big banks Wednesday at 4 p.m. EDT. The test simulates a sharp global downturn with major losses tied to commercial and residential real estate and company debt.
This year’s results won’t change capital requirements or what banks can pay out. Bank of America investors will focus on projected credit losses and the trough in its common equity tier 1 ratio, which measures top-quality capital against risk-weighted assets. Bank of America ended Q1 with $200 billion in that capital and an 11.2% ratio.
Trading revenue is another way for the bank to boost earnings. Co-President Jim DeMare said this month second-quarter markets revenue may top the bank’s previous call for 15% growth. “A lot more of the activity and revenues have been coming from the equity business,” he said. Reuters
But rate trades may unwind if deposits get pricier faster than assets, the yield curve narrows, loan growth cools, or the stress test hits with steeper losses. If the Fed raises less than BofA economists project, that could also hamper gains. The $2 billion sensitivity is a modeled downside, not a guarantee for potential upside.
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