JPMorgan Predicts No Fed Rate Cut at September FOMC Meeting
JPMorgan analysts forecast that the Federal Reserve will hold interest rates steady at the September FOMC meeting, despite recent hints from Chair Jerome Powell about potential easing. The report highlights growing internal divisions over rate cuts as dovish voices gain strength with the addition of Steven Miran to the committee. This shift reduces the likelihood of a unanimous decision and makes a September rate cut unlikely. Markets should adjust their expectations and pricing models for Fed policy. Traders and investors are advised to monitor Fed communications closely, as extended high rates may continue to pressure risk assets and influence liquidity conditions.
Bearish
JPMorgan’s prediction that the Fed will maintain current high rates through September implies reduced liquidity and tighter financial conditions. Historically, prolonged elevated interest rates—like those seen in late 2022—have pressured risk assets, including cryptocurrencies. In the short term, traders may face downward pressure on prices as borrowing costs remain high and speculative capital is constrained. Over the medium to long term, continued hawkish policy could delay a broader market rally until clear signals of easing emerge. Overall, the news is likely to weigh on market sentiment and trading activity, signaling a bearish outlook for risk assets.