JPMorgan Chase: The Federal Reserve hints at being more cautious about the easing cycle

According to Golden Finance, Kerry Craig, Global Market Strategist at J.P. Morgan Asset Management, stated in a report that the Federal Reserve has signaled a more cautious approach towards the easing cycle. Craig said that Powell had communicated well by balancing the "urgency of returning to neutral interest rates" and acknowledging a "relatively stable economic state."

Craig added that people's focus has shifted more towards employment-first approaches rather than inflation. The scale of rate cuts may not be as important as the ultimate goal, which is to adjust policy rates closer to the Fed's neutral view by further cutting 150 basis points by the end of 2025 and into 2026. Craig stated that if nominal growth and easing cycles remain stable, stocks and bonds should benefit.