- JPMorgan expects the Fed to start cutting rates in September as labor data weakens.
- Trump-backed Fed board nominee Stephen Miran could influence decisions on future policy direction.
JPMorgan now expects the Federal Reserve to begin lowering interest rates at its meeting in September. The bank forecasts a total of four rate cuts in 2025, each of 25 basis points, which would bring the federal funds rate down to 3.25%–3.5% by the end of the year.
This outlook marks a shift from the firm’s previous forecast, which had anticipated no cuts until December. The updated timeline comes as analysts point to recent signs of slowing economic momentum.
🚨 LATEST: JPMorgan now expects the Fed to cut rates four times in 2025, starting as early as September and bringing the benchmark down to 3.25%–3.5%.
Wall Street is bracing for a full easing cycle – bullish fuel for risk assets and Bitcoin. pic.twitter.com/Ahykvridtk
— CryptosRus (@CryptosR_Us) August 17, 2025
JPMorgan analysts say recent job market data is a key reason for the revised forecast. The unemployment rate rose to 4.2% in July, up slightly from 4.1% in the prior month. Weekly jobless claims have also edged higher.
Market pricing has followed suit. Traders now assign an 89.2% chance of a rate cut at the September 16–17 Fed meeting, according to the CME Group’s FedWatch tool. That figure stood at just 37.7% last week.
Political Pressure Builds Ahead of Fed Meeting
Interest rate policy remains a focus in Washington. Former President Donald Trump has pushed for lower borrowing costs and has been openly critical of Fed Chair Jerome Powell. On several occasions, Trump has suggested Powell should resign. At one point, he even shared a draft letter proposing Powell’s dismissal, though he later backed away from that stance.
Trump recently nominated Stephen Miran, his current economic adviser, to fill a temporary seat on the Federal Reserve Board. Miran is known for supporting lower rates. His nomination is pending Senate approval. JPMorgan noted, “His presence could increase divisions within the rate-setting committee.”
Leadership Changes May Be Ahead
Sources told Bloomberg that Trump’s team is considering Christopher Waller as a potential successor to Powell. Powell’s term ends in May 2026, though pressure on his role may build earlier.
While legal protections prevent the removal of a Fed chair based solely on policy disagreements, speculation continues. Treasury Secretary Scott Bessent said in a recent interview that Trump has “repeatedly said he’s not going to fire” Powell.
With the next policy meeting a month away, attention now shifts to economic reports and whether the Fed signals a turn in policy. Market reaction to any adjustment could shape the outlook for the broader financial landscape through the end of the year.
