Bank of America has maintained its forecast for two Fed rate cuts in 2026, despite recent forecast revisions pointing to softer growth and higher inflation. The bank believes that the Fed will ultimately look past supply-driven inflation, weak wage pressure, and political dynamics rather than hold rates higher for longer. The change comes as incoming Fed Chair Kevin Warsh is expected to arrive in place and accumulate evidence of cooling inflation to argue for easing. However, BofA acknowledges risks of no cuts at all and maintains its base case. The Fed's own data indicates a more cautious stance, with energy prices from the Iran conflict contributing to inflation. Bofa also noted that consumer spending rose only 0.1% in February, with annualized pace of only $8%.