The brokerage raised its quantum of cuts for next year to 100 bps from 75 bps, with the central bank expected to lower rates in March, June, September, and December.

It also raised the country's economic growth forecast on a quarterly average basis by 0.6 percentage points to 1.2% for next year, driven by stronger consumer spending.

"Incoming data is signaling the U.S. economy can enjoy both modest growth and disinflation simultaneously," BofA's U.S. economist Michael Gapen said.

The Fed's dovish pivot at the December policy meeting further resulted in the advancement of the timing of the central bank's first rate cut, Gapen added.

A slew of Wall Street brokerages last week advanced their expectations over the timing of the first interest-rate cut after Federal Reserve Chair Jerome Powell signaled a likely end to the historic tightening in monetary policy that began in March 2022.