JP Morgan Asset Management expressed on Wednesday that it does not anticipate the Federal Reserve to implement further interest rate hikes this cycle. This statement came after the recent headline inflation data displayed a downward trajectory. Confidence in this prediction is echoed by Fed interest rate futures, which indicate a growing belief that the Fed is unlikely to raise interest rates following August's significant rise in U.S. consumer prices. This rise was the highest in 14 months, while the annual growth in headline inflation was at its lowest in nearly two years.
David Kelly, chief global strategist at JP Morgan, shared his perspective on the situation. He noted that despite the ongoing rise of oil prices in early September, their impact on the Consumer Price Index (CPI) should be limited. "We think that, barring a new shock, annual headline consumption deflator inflation will remain below the FED's 2% target in the fourth quarter of 2024," Kelly stated.
The Federal Reserve is set to announce its short-term interest rate forecasts for the end of 2023 on September 20. Given that there are only two meetings remaining after September, these gatherings will provide substantial indications about any potential interest rate movements in November.
In June's release of its projections, many anticipated that interest rates would rise one notch above their current level in 2023. This view was largely supported by the minutes from the FED's July meeting. However, economic data since then have indicated some signs of moderating inflation and slowing employment growth.
The upcoming September 20 announcement is also being closely watched by Bitcoin and cryptocurrency investors due to its potential significant impact on the industry.
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