JPMorgan Chase: Fed Rate Cut Could Hurt Stock and Bond Markets

On September 16th, Kelly, the Chief Global Strategist of JPMorgan Asset Management, stated that if people think that the Fed's rate cut this week was the result of political pressure and deviated from the Fed's economic outlook, then the widely anticipated rate cut will increase the risks to stocks, bonds, and the dollar. Kelly wrote that bond and stock investors on Wall Street have been cheering for the Fed to resume rate cuts after a nine-month pause. However, after the recent rebound, they should adopt a cautious attitude and seek diversified investments. Kelly said, "To a certain extent, the Fed's decision this week is regarded as a surrender to political pressure, adding new risks to the U.S. financial markets and the dollar." "There is a market bubble," and now the accommodative policy is more likely to weaken demand rather than stimulate it, "ultimately being unfavorable to the stock market, bond market, and the dollar." (FXStreet)