JPMorgan joins the 50 basis point cut call

JPMorgan CEO Jamie Dimon has recently highlighted his belief that inflation is still problematic but his economics team disagrees.

They’ve now joined Citigroup in calling for back-to-back 50 basis points cuts in September and November to kick off the rate-cutting cycle.

“So we now think the FOMC cuts by 50bp at both the September and November meetings, followed by 25bp cuts at every meeting thereafter. From a risk management perspective we think there’s a strong case to act before September 18th,” economist Michael Feroli writes.

The market is clearly in agreement with an 80% probability of 50 bps now priced in to Fed funds futures for September. At the November meeting, a 87.5 bps are priced in. For year end, it’s 116 bps.

This has been an incredible shift since the Fed dots forecast just one cut this year in June.

This article was written by Adam Button at www.forexlive.com.