J.P. Morgan Revises Fed Rate Cut Forecast to September

J.P. Morgan now expects the U.S. Federal Reserve to cut interest rates by 25 basis points at its September 16–17 meeting, moving up its previous forecast from December. The shift is driven by:

• Weakening labor market signals
• Uncertainty surrounding Trump’s nomination of Stephen Miran to the Fed Board

👥 Fed Dynamics Shift

• Trump nominated Stephen Miran, Chair of the Council of Economic Advisers, to replace Governor Adriana Kugler.
• If confirmed in time, J.P. Morgan warns of up to three dissents at the upcoming meeting.

📊 Market Reaction

• Traders now price in a 91.4% chance of a September rate cut, up from 37.7% last week, according to CME’s FedWatch tool.
• The Fed’s decision may hinge on August jobs data—with an unemployment rate of 4.4% or higher potentially justifying a larger cut.