JPMorgan CEO Jamie Dimon recently reiterated his belief that inflation is still a problem, but his economic team disagrees.
They have now joined Citigroup in calling for consecutive 50 basis point rate cuts in September and November to kick off a rate-cutting cycle.
“We now believe that the FOMC will cut rates by 50 basis points at its September and November meetings, followed by 25 basis points at each meeting thereafter. From a risk management perspective, we believe there is a strong case for a move before September 18,” wrote economist Michael Feroli.
The market is clearly pricing in an 80% chance of a 50 basis point rate cut in September Fed Funds futures. At the November meeting, 87.5 basis points were quoted. At year-end, 116 basis points were quoted.
This was an incredible turnaround since the Fed had forecast only one rate cut this year in June.
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