As the big banks kicked off earnings season, Bank of America (BAC -0.49%) was among the bellwethers and a big miss could have signaled trouble for an already recession-wary market. Whether BoA's second-quarter 2022 results were a beat or a miss remained firmly in the eye of the beholder, though, as the company's management unsurprisingly gave the data a positive spin while the skeptics had ample fodder for their glass-half-empty conclusions.

At the same time, dip buyers might salivate at the chance to buy Back of America shares at a seemingly attractive valuation. Caution may be warranted, however, as BoA's bull case is predicated on recent central-bank policy -- which, history will show, is subject to change without notice.

Taking an interest in interest

So, is Bank of America stock a buy as the price pulls back to early 2021 levels, and as BoA's trailing-12-month price-to-earnings ratio looks enticing at 10?  Bank of America's second-quarter results ought to help investors decide whether to buy the dip or pass and wait.

Bolstering the bearish bets were BoA's bottom-line results. The bank reported Q2 2022 earnings of $0.73 per share, falling short of Wall Street's estimate of $0.75 and the year-earlier quarter's $1.03. So far, not so good.

BoA's revenue increased 6% year over year to $22.7 billion, and this result was roughly in line with analysts' expectations, so there's nothing to write home about here. The devil/angel is in the details, though, as net interest income increased 22% to $12.4 billion while the company's non-interest income fell 9%.

Thus, interest income growth was the crown jewel -- maybe the only jewel -- of BoA's quarter. Chief Financial Officer Alastair Borthwick didn't hesitate to model Q3 net interest income growth to the optimistic tune of $900 million to $1 billion, adding that he expects "the majority of that to fall to the bottom line."

With non-interest profits sliding, Borthwick sounded awfully sanguine about the company's future prospects. In that vein, he assured that Bank of America's "earnings generation over the next 18 months will provide ample capital to support growth, pay dividends, buy back shares" and more.

That's one heck of a forecast during a time when recession calls are ramping up. Are the execs at BoA counting on interest income growth to keep the company afloat? Hopefully not, as the current catalyst of rising interest rates won't necessarily be a reliable factor.

Depending on the undependable

Chief Executive Officer Brian Moynihan acknowledged that higher interest rates helped drive Bank of America's strong second-quarter net interest income growth while allowing the company to "perform well in a weakened capital markets environment." Investors should consider, though, that the current high-interest regime might be unique and, to borrow an abandoned term from Federal Reserve Chairman Jerome Powell, transitory.

Hearken back to late 2018, if you will, a simpler time when COVID-19 wasn't a consideration and Powell dared to raise the federal funds rate -- and, by extension, the 10-year Treasury yield -- to its highest level in roughly five years. As you may recall, the stock market immediately had a taper tantrum and dove 20%. In response, the Fed quickly backed off and slashed interest rates, and all was calm in the financial markets once again.

History isn't exactly repeating itself in mid-2022, though it certainly appears to be rhyming. This time around, the 10-year yield is up to 3% again and the stock market dropped 20% -- but unlike in late 2018, there's sky-high inflation to contend with in 2022. Of course, elevated inflation isn't wonderful for big banks' bottom lines as it doesn't get customers in the mood to borrow money to make purchases. However, high inflation did prompt the Fed to hike interest rates, and this gave BoA a nice revenue boost in Q2.

If 2018 demonstrated anything, though, it's that Powell's Fed won't hesitate to reverse course. Quite possibly, just a month or two of falling (or heck, even plateauing) inflation figuresand put rate hikes on pause or switch to rate cuts.

In that scenario, Bank of America couldn't so readily rely on interest income growth. Before jumping into BoA stock as a buy-the-dip trade, therefore, think about what made the company's Q2 as good as it was -- and how a Fed U-turn could make the coming quarters much more challenging for businesses that benefit from a high interest rate environment.