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Will Stock Upgrades Push Bank Of America Higher?


Rate hike talk is beneficial for Bank of America.

Janet Yellen, the Fed's chair, said last week that the case for higher rates "has strengthened".

More analyst upgrades and raised price targets could be a catalyst for Bank of America's shares.

Reward-to-risk equation remains compelling.

Bank of America (NYSE:BAC) will likely see a nice bump in earnings when the Federal Reserve finally wakes up and moves the interest rate needle. For years the central bank has been reluctant to raise rates, fearing that a rate hike would have a negative effect on the U.S. economy. As a result, I have contended that the Federal Reserve's interest rate policy is the single biggest risk factor for Bank of America over the short haul.

The odds of a rate hike have increased though...that at least was the takeaway from Janet Yellen's latest public remarks. The Fed chair argued that strengthening labor market conditions and other economic stats increasingly point to a near term rate hike. Janet Yellen's precise words were these:

Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.

The Federal Reserve...