Wall Street’s largest bank had previously forecast a hold after the publication of the delayed September jobs report last week.
The Federal Open Market Committee, led by chair Jerome Powell, meets in Washington on Dec 9 and 10. JPMorgan forecasts the Fed will carry out two, quarter-point cuts next month and in January.
“We are back to looking for a final cut in January,” Feroli wrote in a note to clients. “While the next FOMC meeting remains a close call, we now believe the latest round of Fedspeak tilts the odds toward the committee deciding to cut rates in two weeks from today.”
JPMorgan’s refreshed view aligns with the market perspective of swap traders, who are presently pricing a roughly 80% chance that the Fed will ease policy by a quarter-point next week. That’s up from less than 30% a week ago, after the publication of the September labour data but before Williams’ comments.
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