J.P.Morgan sees Fed cutting rates at each of its next four meetings

J.P.Morgan now forecasts the U.S. Federal Reserve will implement 25 basis point interest rate cuts at each of its next four meetings, bringing the policy rate to 3.5%, citing signs of a slowing labor market and broader economy. Concurrently, the brokerage highlighted President Trump's proposed nomination of Stephen Miran as a new Fed Governor, which JPM analysts suggest could usher in deeper institutional reforms at the central bank.

Analysis

J.P. Morgan has adjusted its U.S. monetary policy forecast, now anticipating the Federal Reserve will implement 25 basis point interest rate cuts at each of its next four meetings. This dovish stance, which would lower the policy rate to 3.5%, is predicated on observable signs of a slowing labor market and weakening broader economy. The brokerage's analysis also highlights a significant potential development in central bank governance, noting President Trump's proposed nomination of economist Stephen Miran to the Fed board. According to J.P. Morgan analysts, this appointment could act as a catalyst for deeper institutional reforms at the Federal Reserve, introducing a new variable into the long-term policy outlook.

Key Decisions for Investors

• Investors should evaluate portfolio exposure to interest rate-sensitive assets, as the forecasted 100 basis points of cuts would typically favor fixed-income securities and growth-focused equities.
• Closely monitor incoming U.S. labor market and economic growth data, as any strength or resilience in these reports would challenge the core rationale for J.P. Morgan's dovish forecast.
• Factor in the political dimension of Fed appointments, as the nomination of Stephen Miran and the prospect of institutional reforms could increase uncertainty and potential volatility around future monetary policy decisions.