Financial giant JPMorgan Chase is sticking to its forecast for another significant rate cut by the Federal Reserve in November, potentially by 50 basis points. The bank’s prediction comes on the heels of the Fed’s recent half-point interest rate reduction on Wednesday.
Michael Feroli, JPMorgan’s chief U.S. economist, reiterated his outlook for a more aggressive rate cut in November, but emphasized that this prediction is contingent on upcoming jobs reports. Feroli had accurately anticipated Wednesday’s rate cut since August, maintaining his stance even as other Wall Street firms adjusted their forecasts.
According to JPMorgan’s rate strategists, Treasury yields are expected to remain relatively stable until the release of the September employment report provides more clarity.
“We are still expecting a faster pace of rate normalization than the median dot,” Feroli wrote in a note to clients following the Fed’s decision. He added, “Our expectation for a 50bps cut at the next meeting in early November is contingent on further softening in the two jobs reports between now and then.”
While JPMorgan remains steadfast in its prediction, other Wall Street firms have adjusted their outlooks. Citigroup economists, for example, abandoned their call for a half-point cut before this week’s Fed meeting. Goldman Sachs, led by Jan Hatzius, now anticipates a series of quarter-point cuts extending into mid-2025. They view the November decision as “a close call” depending on labor data.
Also Read: JPMorgan’s Jamie Dimon Warns – 70% Chance Of U.S. Stagflation Amid Rising BRICS Influence
Treasury yields dropped on Thursday, reflecting the market’s anticipation of further rate cuts from the Federal Reserve. Two-year yields decreased by four basis points to 3.58%, and 10-year yields fell by one basis point to 3.69%. As the economy continues to navigate uncertainty, the Federal Reserve’s monetary policy decisions will remain a crucial factor influencing financial markets.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
