JPMorgan: Imminent Fed Rate Cut Mistake Could Trigger Major Turmoil in US Stocks, Bonds, and Currency Markets

Odaily Planet Daily – Market expectations for a Federal Reserve rate cut are rising, but JPMorgan’s London strategy team has poured cold water on the optimism. The bank warns that the real reason behind a rate cut may not be favorable for equities and could even represent the “wrong kind of easing,” potentially triggering a chain reaction in the markets. JPMorgan strategists anticipate that the future will likely be a combination of the first and third scenarios—namely, a slowdown in economic activity accompanied by a rebound in inflation. They point out that since 1980, the US dollar typically weakens before a rate cut and continues to decline afterward, with bond yields also falling. The strategists at JPMorgan state that, in most cases, they expect the dollar to hit new lows and US Treasury yields to continue to decrease. (Jin10)