⚠ A Guide Built on the Forward CurveModerate threat

Bank of America (BAC) — threat to the moat

Bank of America's 2026 income guidance assumes a September rate hike, which makes it partly a forecast about the Federal Reserve.

Bank of America's net interest income guidance is conditional. In July the chief financial officer said the bank expected 2026 growth at the upper end of its 6% to 8% range based on the current forward curve, which "has one 25 basis point rate hike in September"1.

2026 NII growth guidance, top of range (%)5-7%January6-8%, upper endJulyBank of America Q4 2025 presentation; Q2 2026 earnings call
Raised twice, on a forward curve.

That makes the guidance a statement about rates as much as about the bank. The bank's own sensitivity table shows that a 100 basis point instantaneous rise would add about $1.0 billion to net interest income over twelve months and a 100 basis point fall would remove about $2.2 billion2.

The repricing of fixed-rate assets continues whatever the Federal Reserve does, but the size of the gain depends on where rates settle.

The January guidance itself was specific about what it assumed. The bank expected net interest income on a fully taxable-equivalent basis to grow 5% to 7% in 2026, and other income of $100 million to $300 million a quarter3. Each raise since has come from better deposit and loan growth as well as rates.

The guidance is updated each quarter. A cut to the range, rather than another raise, would be the sign that rates or deposit costs had moved against the plan.

References
  1. ReportedIn July the chief financial officer said the bank expected 2026 growth at the upper end of its 6% to 8% range based on the current forward curve, which "has one 25 basis point rate hike in September".
    Bank of America second-quarter 2026 earnings call transcript. — Q2 2026 · publ. 14 July 2026 · source ↗
  2. ReportedThe bank's own sensitivity table shows that a 100 basis point instantaneous rise would add about $1.0 billion to net interest income over twelve months and a 100 basis point fall would remove about $2.2 billion.
    Bank of America Form 10-Q for the quarter ended 30 June 2026 - held-to-maturity securities, interest-rate sensitivity, capital requirements and the OCC consent order. — Q2 2026 · publ. 31 July 2026 · source ↗
  3. ReportedThe bank expected net interest income on a fully taxable-equivalent basis to grow 5% to 7% in 2026, and other income of $100 million to $300 million a quarter.
    Bank of America fourth-quarter 2025 earnings presentation, Form 8-K exhibit 99.2 - the 2026 outlook. — Q4 2025 · publ. 14 January 2026 · source ↗
Sources
Generated September 25, 2026