tl;dr
JPMorgan Chase is adjusting its forecast for Federal Reserve rate cuts due to concerns about a potential US recession. Weaker-than-expected economic reports, including a bleak jobs report, triggered a stock market decline. JPMorgan now anticipates a 100 basis points rate cut over two months, citing ...
JPMorgan Chase is revising its forecast for Federal Reserve rate cuts amid concerns about a potential US recession. Weaker-than-expected economic reports, including a dismal jobs report, triggered a stock market decline. JPMorgan now anticipates a 100 basis points rate cut over two months, citing concerns that the Fed may be behind the curve. This shift reflects a rapid change in market sentiment, with investors questioning the timing of the Fed's rate cuts.
The retreat in equities was particularly notable in Asian markets, with the Nasdaq dropping 2.43% and the Dow falling 1.51%. JPMorgan's outlook reflects a rapid market sentiment shift as fears of a US recession grip global markets.
JPMorgan Chase is reportedly changing its forecast for incoming rate cuts from the Federal Reserve. A series of weaker-than-expected reports on the US economy, including a bleak jobs report, triggered a stock market retreat on Friday. JPMorgan now believes the Fed will cut rates by 100 basis points in a two-month time span, with a 50bp cut at the September meeting, followed by another 50bp cut in November.
This shift highlights a rapid change in market sentiment. Investment strategist at Global X Management, Billy Leung, says that investors' outlooks have deteriorated rapidly. "The narrative is changing quickly after a confirmation of the FOMC’s September rate-cut path. As manufacturing and jobs data are pointing toward recession levels, investors are now questioning whether the Fed is cutting too late."
The retreat in equities was especially notable across Asia on Friday, with indicators suggesting Japanese markets had their worst day since 2016. The Nasdaq dropped 2.43%, closing at 16,776, representing a 10% drop from recent highs. Meanwhile, the Dow fell 610.71 points, or 1.51%, closing at 39,737.26. At its session low, the Dow was down 989 points.