Bank of America economists Aditya Bhave and Mark Cabana stated in a report that Federal Reserve Chairman Kevin Warsh's communication after the July 29 meeting was too vague and lacked clear guidance on his "reaction function" (i.e., how the Federal Reserve would adjust interest rates). This uncertainty has increased the risk premium demanded by investors, creating a "tax" effect on the economy and transmitting through government bond yields to mortgage and other financing costs.

Bank of America refutes the market's theory that the Federal Reserve is tightening policy through a "3D chess game" in the bond market, arguing that the rise in bond yields reflects concerns about the Federal Reserve's policy uncertainty, rather than the market's confidence in the Federal Reserve's ability to control inflation. The bank expects the Federal Reserve to raise interest rates by 75 basis points in 2026, with 25 basis point hikes in September, October, and December, bringing the federal funds rate to 4.25%-4.50%, and expects this rate to be maintained until 2027 and 2028. Nevertheless, Bank of America expects economic growth to average close to 2.5% in the second half of 2026, with the unemployment rate around 4.2% by year-end, but core PCE inflation will still be above 3% this year.