Bank of America Research economists remain convinced that the Federal Reserve will not cut interest rates in 2025, despite a recent wave of disappointing jobs data fueling market speculation of an imminent policy shift. The reason, according to a new research note: the U.S. economy is headed toward a battle with stagflation—not recession—and cutting rates could worsen that toxic mix of stagnation and inflation.

The BofA team, led by senior U.S. economist Aditya Bhave, cited two major Trump administration policies as the key factors in their call: tough new immigration restrictions and a fresh series of import tariffs.

Why it’s not a recession, according to BofA

First things first, Bhave’s team turned to the July jobs report that stunned Wall Street with a net downward revision of 258

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