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JPMorgan expects September Fed rate cut despite CPI risks and warns of S&P 500 volatility

JPMorgan expects September Fed rate cut despite CPI risks and warns of S&P 500 volatility

Bank signals possible volatility in equities as inflation data sets the pace for Fed decisions

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by Vivian Nguyen

JPMorgan expects the Federal Reserve to cut interest rates by 25 basis points in September despite lingering uncertainty around consumer price index data.

The bank projects August CPI at 2.9% year-over-year, with core CPI holding steady at 3.1% year-over-year. A higher-than-expected inflation reading could push rate cuts to October or December.

JPMorgan outlined potential market reactions to different CPI scenarios. Core CPI above 0.40% could cause the S&P 500 to drop 1.5% to 2.0%. A reading between 0.35% and 0.40% may trigger losses of 0.5% to 1.0%. Core CPI below 0.25% could lift the index 1.3% to 1.8%.

The bank maintains a tactically bullish stance while flagging risks from inflation, employment data, and trade developments.

Disclosure: This article was edited by Vivian Nguyen. For more information on how we create and review content, see our Editorial Policy.
MARKETS

JPMorgan expects September Fed rate cut despite CPI risks and warns of S&P 500 volatility

JPMorgan expects September Fed rate cut despite CPI risks and warns of S&P 500 volatility

Bank signals possible volatility in equities as inflation data sets the pace for Fed decisions

by Vivian Nguyen

Share

Add us on Google

JPMorgan expects the Federal Reserve to cut interest rates by 25 basis points in September despite lingering uncertainty around consumer price index data.

The bank projects August CPI at 2.9% year-over-year, with core CPI holding steady at 3.1% year-over-year. A higher-than-expected inflation reading could push rate cuts to October or December.

JPMorgan outlined potential market reactions to different CPI scenarios. Core CPI above 0.40% could cause the S&P 500 to drop 1.5% to 2.0%. A reading between 0.35% and 0.40% may trigger losses of 0.5% to 1.0%. Core CPI below 0.25% could lift the index 1.3% to 1.8%.

The bank maintains a tactically bullish stance while flagging risks from inflation, employment data, and trade developments.

Disclosure: This article was edited by Vivian Nguyen. For more information on how we create and review content, see our Editorial Policy.