JPMorgan Chase is now expecting the Federal Reserve to slash interest rates by a whopping 100 basis points in the next two months. This sudden change in forecast comes as worries about a US recession are growing stronger.
The recent weak economic data, including a disappointing jobs report, has sent shockwaves through the markets. Investors are increasingly concerned that the Fed might be too slow to react to the economic downturn.
JPMorgan believes the Fed will cut rates by 50 basis points in September and another 50 basis points in November. They argue that if the Fed had seen the recent jobs report before their last meeting, they would have already cut rates.
The shift in sentiment is evident in the stock market. Asian markets saw their worst day since 2016, and the Nasdaq dropped 2.43%, marking a 10% decline from its recent peak. The Dow Jones also fell significantly, closing down 1.51%.
Analysts are now questioning whether the Fed is acting too late. The recent economic data, particularly in manufacturing and jobs, suggests the US economy is headed towards a recession.
It remains to be seen whether the Fed will indeed cut rates as aggressively as JPMorgan predicts.
However, the growing recession fears and the recent market volatility highlight the urgency of the situation. /p>
