The bank now expects the Federal Reserve to raise rates in December, revising its prior 2027 projection following recent guidance.
JPMorgan has adjusted its Federal Reserve rate hike forecast to December this year, abandoning its earlier projection of a hike in the second half of 2027. The shift follows Fed Chair Jerome Warsh’s recent communications, which the bank criticized for lacking clarity on inflation strategy and damaging credibility.
Prior to the FOMC meeting, markets anticipated no near-term rate changes, with consensus leaning toward prolonged policy stability. Warsh’s remarks, however, introduced uncertainty by deferring tightening responsibility to bond markets, prompting JPMorgan to reassess its outlook.
The bank stated Warsh’s approach failed to outline a concrete plan, increasing pressure on the Fed committee to act. Bond markets have reacted skeptically, signaling potential challenges to the Fed’s inflation resolve.