JPMorgan Asset Management's Global Market Strategist Kerry Craig Signals Shift in Fed's Approach

In a recent report, Kerry Craig, Global Market Strategist at JPMorgan Asset Management, indicated that the Federal Reserve has signaled a more cautious stance towards its easing cycle. Craig noted that Powell communicated effectively by balancing "the urgency of returning to neutral rates" with the acknowledgment of a "relatively stable economic state."

Craig further added that the focus has shifted more towards prioritizing employment over inflation. The magnitude of rate cuts might not be as critical as the ultimate goal, which is to achieve a neutral stance through an anticipated 150 basis point reduction by the end of 2025, followed by adjustments closer to the Fed's neutral policy rate in 2026. Craig stated that if nominal growth and the easing cycle remain stable, both stocks and bonds are expected to benefit. (Jin10)