Bank of America is predicting the Federal Reserve will issue rate hikes by the end of this year in response to rising inflation. They are predicting a three-quarter-point increase in the benchmark rate. General Motors replaced 1,000 workers with “collaborative robots” in one plant alone. Oracle revealed it replaced 21,000 workers with AI solutions so far this year. The loss of jobs through technology, rising inflation, and potential rate hikes portend a poor-performing economy leading up to the November 2026 Midterm elections.
The Fed will bring down the hammer on inflation with a series of rate hikes this year, BofA says – Fortune
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The bank’s previous base case was for rates to remain steady through the year. But last week’s Federal Open Market Committee meeting, where half of policymakers predicted rate hikes, as well as new Fed Chairman Kevin Warsh’s surprisingly hawkish remarks, prompted analysts to change their view.
The Fed kept rates on hold last week, and BofA sees it doing the same next month. Then the first increase should come in September, the bank predicted, followed by another in October and December, reversing the last cut made last year, when the central bank lowered the federal funds rate by 0.25 percentage points on Dec. 10, 2025.
Since then, the economic landscape changed dramatically. In the fall, the Fed cut rates as job data weakened while anticipating President Donald Trump’s tariffs would only have short-term impact on inflation. But the labor market strengthened this year, and Trump’s Iran war sent oil prices soaring.
“Meanwhile, the Fed’s inflation problem has gotten unambiguously worse,” BofA said. “Core PCE could reach 3.5% in May, nearly 70bp higher than it was a year ago. The pickup has been partly due to tariffs and other one-offs. The Fed was willing to look through the tariffs, but it is losing patience after the latest round of supply shocks. Also, housing-driven disinflation has now mostly run its course, while other core services remain very sticky.”
General Motors Replaces 1,000 Human Workers with ‘Collaborative Robots’ at Detroit Plant– slaynews.com
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EXCERPT:
General Motors has replaced roughly 1,000 workers with just 50 robots at its flagship Detroit-area manufacturing facility, sparking backlash from labor unions and reigniting concerns about automation’s growing impact on American jobs.
The move comes as the auto giant looks to cut costs and improve efficiency amid slowing demand for electric vehicles and increasing pressure to remain competitive in a rapidly changing industry.
According to reports, the new “collaborative robots,” commonly known as cobots, have been installed on the assembly line at GM’s Factory ZERO plant in Michigan, where they now assist with attaching body panels to vehicles as they move through production.
Oracle Cut 21,000 Jobs in 12 Months Amid AI Adoption– www.ndtv.com
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EXCERPT:
“The adoption and deployment of AI technologies across our operations have resulted, and may continue to result, in reductions to our workforce,” Oracle said Monday in an annual financial regulatory filing.
The company’s global headcount shrank to 141,000 full-time employees as of the May 31 end of the fiscal year, compared with 162,000 a year earlier, Oracle said. The reductions led to about $1.8 billion in restructuring costs.
Oracle is under financial pressure because of an expensive build-out of AI data centers for customers like OpenAI. Earlier this year, it began cutting thousands of jobs as part of efforts to save cash, Bloomberg has reported. The exact scope of the cuts was never formally disclosed.
As of the end of May, the company had about 49,000 US workers while about 92,000 were employed internationally.
