NEW YORK, January 26, 2026, 12:51 EST — Regular session
- Bank of America shares edged up in midday trading, following gains across the broader U.S. banking sector.
- Attention now turns to the Federal Reserve’s January meeting and what it means for the short-term interest rate outlook.
- Investors are closely monitoring potential fallout from the proposed 10% cap on credit-card interest rates.
Shares of Bank of America edged up roughly 0.6% to $52.06 on Monday, with U.S. bank stocks holding steady ahead of a busy week featuring a Federal Reserve decision and a wave of corporate earnings reports.
The setup is crucial for BAC since rate expectations directly impact bank earnings. Rising short-term rates can boost the interest banks charge on loans, but they also increase the cost banks pay on deposits. That balance can flip quickly when investors adjust their outlook on rate cuts.
The Fed is slated to keep its benchmark rate steady between 3.50% and 3.75% this week, yet the meeting is under the spotlight amid renewed political pressure on the central bank. “Trump will need greater turnover at the Fed to fully control the institution,” said Tim Duy, chief U.S. economist at SGH Macro Advisors. (Reuters)
U.S. stocks climbed across the board earlier, with investors positioning ahead of megacap tech earnings and the Fed’s upcoming statement. Chris Larkin of E*Trade at Morgan Stanley noted, “Wednesday’s Fed announcement will likely keep politics in the headlines.” (Reuters)
Shares of other major U.S. lenders also climbed. JPMorgan Chase ticked up around 0.9%, Wells Fargo jumped about 1.2%, and Citigroup climbed roughly 1.2% by midday.
Bank of America’s guidance has put rates squarely in the spotlight. In its quarterly report earlier this month, the bank projected net interest income—the difference between earnings on loans and costs on deposits—to climb 7% this quarter. It also reaffirmed its forecast of 5% to 7% growth for 2026. (Reuters)
Off the stock tape, a Bank of America-backed issuer made moves in the market-linked notes space. According to a prospectus filing, BofA Finance LLC plans to issue callable yield notes maturing January 26, 2027. These notes are linked to major U.S. equity indexes and offer a fixed coupon rate starting at 8.75% annually. Payments depend on the creditworthiness of BofA Finance and Bank of America, which guarantees the notes.
Regulatory risk remains a key concern for traders. Reuters reported last week that Bank of America is exploring new credit cards with a 10% interest rate, potentially to align with President Donald Trump’s push for a wider rate cap. (Reuters)
The path isn’t straightforward. Yields dropping faster than expected could tighten lending spreads. A hard cap on card rates would target some of consumer banking’s most profitable areas — but only if it becomes law. There’s also the risk that the Fed’s statements fall short of market expectations, causing rate bets to shift with each new data release.
Wednesday brings the next major event: the Fed will release its policy statement at 2:00 p.m. ET, with Chair Jerome Powell holding a press conference half an hour later at 2:30 p.m. (Federal Reserve)
Bank of America is set to report its next quarterly earnings on April 15. (Bankofamerica)
