JPMorgan predicts Fed will cut rates in September — and four total times this year
The nation's largest bank, led by Jamie Dimon, expects a quarter-point cut after the Fed's two-day meeting on Sept. 16-17, followed by three more cuts of the same size at their remaining meetings — which would bring the benchmark rate down to a range between 3.25% and 3.5%.
JPMorgan's earlier projection was that the Fed would wait until December to start lowering rates.
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4 Fed Chair Jerome Powell speaks at a July 30 press conference as political pressure mounts over interest rate policy. JPMorgan is predicting rate cuts as soon as next month.
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The bank's analysts pointed to signs of weakness in the labor market, including a softer jobs report and rising jobless claims, as the main reason for the accelerated timeline.
The unemployment rate in July ticked up to 4.2%, from 4.1% the previous month.
Market pricing also reflects growing confidence in a September move.
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Traders now price in a 89.2% chance of a rate cut in September, compared with 37.7% last week, according to CME Group's FedWatch tool.
President Trump has repeatedly pressured Fed Chair Jerome Powell to lower rates, arguing that cheaper borrowing costs are necessary to boost economic growth and lower the government's interest expenses.
On Thursday, Trump nominated Stephen Miran, his current chief economic adviser, to fill a temporary seat on the Federal Reserve's governing board, replacing outgoing Governor Adriana Kugler.
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Miran's confirmation before the Sept. 16–17 policy meeting remains uncertain, but JPM said his presence could increase divisions within the rate-setting committee.
4 People wait in line to attend a job fair in Los Angeles as labor market data show signs of weakness ahead of the Fed's September meeting.
AFP via Getty Images
Miran is viewed as a strong supporter of Trump's economic agenda and has consistently favored lower interest rates.
Some of Miran's earlier proposals have included shortening the terms of board members and increasing presidential authority over the Fed.
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If confirmed, Miran would serve through January 2026, giving Trump time to decide whether to nominate him for a full 14-year term or consider him for other leadership roles at the Fed, including the chairmanship.
A Bloomberg News report from Thursday cited sources as saying that Trump aides consider Fed Governor Christopher Waller as the top contender to succeed Powell, whose term ends next May.
4 President Trump gestures during an Oval Office meeting on Aug. 7 amid tensions with Powell.
Yuri Gripas/UPI/Shutterstock
Trump has made no secret of his frustration with Powell's refusal to start slashing rate despite the administration's calls for steep reductions.
Powell has warned that cutting too quickly could allow inflation to flare up again — especially given the inflationary effects of Trump's new tariffs and expansive fiscal policies.
The disagreement has turned personal. Trump has repeatedly derided Powell in public, calling him a 'moron,' a 'numbskull,' and one of his 'worst appointments.'
4 JPMorgan expects a quarter-point cut in September, followed by three more cuts of the same size at later meetings.
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He has urged Powell to resign and has even shown lawmakers a draft letter dismissing him, though he later said he did not plan to fire Powell before his term ends.
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In July, tensions escalated when Trump visited Fed headquarters and engaged in a visibly strained exchange with Powell over cost overruns in a $2.5 billion renovation project.
Trump suggested those overruns could be grounds for dismissal.
Although the Supreme Court has indicated a Fed chair cannot be removed over policy disagreements alone, Trump's comments fueled speculation that he might try to use management issues as a pretext for removing Powell.
Treasury Secretary Scott Bessent, who has been ruled out as a candidate for Fed chair, told MSNBC's 'Morning Joe' on Thursday that the president 'repeatedly said he's not going to fire' Powell.
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(PNNT) Tuesday, Aug. 12 July consumer price index at 8:30 a.m. ET Before the bell: Circle Internet Group, Inc. (CRCL), Sea Limited (SE), Pony AI Inc. (PONY), Liquidia Technologies, Inc. (LQDA), On Holding AG (ONON), DarioHealth Corp. (DRIO), Paysafe Group Holdings Limited (PSFE), Autolus Therapeutics plc (AUTL), Bitcoin Depot (BTM), Anavex Life Sciences (AVXL), Cardinal Health, Inc. (CAH), Tencent Music Entertainment Group (TME) After the bell: CoreWeave (CRWV), Rigetti Computing (RGTI), Cava Group (CAVA), Rekor Systems, Inc. (REKR), Zevra Therapeutics (ZVRA), DoubleDown Interactive (DDI), H & R Block (HRB) Wednesday, Aug. 13 Before the bell: Arcos Dorados Holdings Inc. (ARCO), Brinker International, Inc. (EAT), Marex Group Plc (MRX), Innoviz Technologies (INVZ), Perspective Therapeutics, Inc. (CATX), Cae Inc (CAE), Elbit Systems (ESLT) After the bell: Cisco Systems (CSCO), Equinox Gold Corp. (EQX), Avino Silver & Gold Mines (ASM), Electrovaya (ELVA), Red Robin Gourmet Burgers (RRGB), SurgePays (SURG), Alvotech (ALVO), Fidelis Insurance Holdings Limited (FIHL) Thursday, Aug. 14 July producer price index at 8:30 a.m. ET Before the bell: First Majestic Silver Corp. (AG), Deere & Company (DE), Inc. (JD), Amcor plc (AMCR), Advance Auto Parts Inc. (AAP), AEBI SCHMIDT GP (AEBI), Applied Industrial Technologies (AIT), Birkenstock Holding (BIRK), Cellebrite (CLBT) After the bell: Applied Materials (AMAT), Nu Holdings (NU), KULR Technology Group (KULR), Nano Nuclear Energy (NNE), SanDisk (SNDK), Pioneer Power Solutions (PPSI) Friday, Aug. 15 Retail sales at 8:30 a.m. ET The Fed's data on industrial production and capacity utilization at 9:15 a.m. ET University of Michigan's consumer sentiment survey at 10 a.m. ET Before the bell: Flowers Foods (FLO) (Jim Cramer's Charitable Trust is long CSCO, AMZN and MSFT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
