Key Takeaways:
JPMorgan Chase now expects the U.S. Federal Reserve to begin cutting interest rates in September 2025, three months earlier than previously forecast.
The bank anticipates three consecutive 25 basis point cuts, citing evolving macroeconomic conditions.
This shift could have broad implications for equities, bond yields, and crypto markets.
JPMorgan Chase has updated its U.S. monetary policy outlook, forecasting that the Federal Reserve will implement three interest rate cuts beginning in September 2025, each by 25 basis points (bps). The bank’s previous projection had anticipated the first cut in December.
The revision follows recent signs of economic softening and growing market consensus that the Fed may pivot to easing sooner than previously expected.
“The macro landscape is shifting, and the likelihood of earlier policy accommodation is rising,” said analysts at JPMorgan, according to Jinshi.
Market Impact and Policy Implications
If realized, the total 75 basis points of easing would mark the Fed’s first rate-cutting cycle since 2020 and could have far-reaching consequences across global markets:
Equities may benefit from lower borrowing costs and improved risk sentiment.
Bond yields are likely to decline further as rate expectations shift.
Cryptocurrencies such as Bitcoin and Ethereum, which often perform well in looser monetary environments, could see renewed demand.
