JPMorgan Chase Forecasts Four Fed Rate Cuts in 2025 as Morgan Stanley Unveils Best ‘Risk-Reward’ Plays for Extended Bull Market

The largest bank in the US believes the Federal Reserve will start loosening monetary policy starting next month.

JPMorgan Chase predicts that the Fed will slash interest rates by 25 basis points (bps) during its meeting between September 16th and 17th, reports the New York Post.

The banking giant also expects the Fed to deliver 25 bps cuts in September, October, and December, lowering its benchmark rate by a full 1% to a range of 3.25%-3.5%. Analysts at the bank say weakness in the US labor market has given the Fed the green light to cut rates earlier than previously expected.

Earlier this month, JPMorgan Chase warned the US economy was flashing a recession signal following major downward revisions to May and June job growth figures.

As JPMorgan anticipates the Fed moving to stimulate the economy, fellow banking giant Morgan Stanley is eyeing several stock market sectors it says offer strong growth potential based on fundamentals.

In a Bloomberg interview, Morgan Stanley chief US equity strategist Mike Wilson says the stock market is in the early stages of a new bull run that began after the “nasty” correction in April. According to Wilson, investors stand to benefit from exposure to three key risk/reward plays.

“Right now, the risk/reward still looks pretty good, where the revisions are positive – things like industrials, financials, parts of the technology sector – these are areas that are continuing to show positive earnings revision breath.

There’s definitely some value in some of these pockets.”

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