JP Morgan now expects Fed to deliver next rate hike in December this year
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Fed chair Warsh has definitely stirred the pot with his latest forward guidance approach, or should I say lack thereof, as he wants markets to do the job on tightening instead. I would argue that the press conference damaged his credibility more so than it looks like he laid down
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4 itemsA New Era
The desk believes the anticipated appointment of Kevin Warsh as Fed chair could mark a watershed moment for U.S. monetary policy, potentially driving further strength in the U.S. dollar while exerting downward pressure on the euro. Per the full note from J.P. Morgan, expectations surrounding Warsh's leadership are tied to a hawkish tilt given recent macro developments, including rising inflation and robust economic data. This perspective aligns with J.P. Morgan's bearish forecast for EUR/USD, projecting a decline to 1.14 by December 2026 amidst a shift in market sentiment. As we navigate through the current landscape, the absence of high-impact events in the upcoming calendar suggests potential stability ahead, but vigilance remains essential.