JPMorgan: Market "overly optimistic" about Fed rate cuts
According to Coindesk, the financial markets may be overly optimistic about the speed and pace of the Federal Reserve's easing policy through interest rate cuts this year. The macro strategy team at JPMorgan, led by Shrenick Shah, stated that key areas of inflation closely monitored by the Fed have not shown clear signs of deflation. They believe that the Fed's commitment to counter potential inflation rebound is still underestimated, which opens the door for adjustments in risk assets. Previously, with inflation expected to decline in 2023 and hints of interest rate cuts from the Fed's December meeting, expectations for rate cuts became widespread. According to data from the federal funds futures market, traders expect a rate cut of 140 basis points this year, nearly double the magnitude indicated by the Fed's December dot plot forecast for interest rates.
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