EBR:PROX 1 June 2025

June 13, 2026, 7:21 AM EDT. Bank of America cautions investors about a potential 1994-style market shock driven by sustained inflation, higher Treasury yields, and ongoing Federal Reserve tightening. With recent headline CPI near 4.2% and unemployment at 4.3%, the bank highlights the risk that inflation's slow cooling could push the annual rate above 5% by midterm elections. This scenario challenges the prevailing investor optimism for imminent Fed rate cuts, now not expected until 2027 per Goldman Sachs. Elevated Treasury yields increase the appeal of government bonds, complicating valuations for stocks, especially in mega-cap tech and AI sectors reliant on future profit growth. Bank of America draws parallels to 1994 when abrupt Fed rate hikes disrupted markets, underscoring the possibility of similar volatility today despite no immediate recession threat.