FX.co ★ JPMorgan sees no reason for Fed to move to rate cuts

According to JPMorgan, the largest US bank by assets, the Federal Reserve has no compelling reason to start cutting interest rates in the current environment. Market strategists cite the US economy that remains fairly resilient and growth projections that have been revised upwards.

"If I'm Jerome Powell, what really is the impetus for me to do anything right now? The economy is doing fine, unemployment is below what the Fed considers to be neutral, the inflation rate is above — even in their longer term projections — their target, and the economy does not seem to be restricted by these rates," JPMorgan said.

Under such conditions, it makes no sense for the Fed to resort to a drastic policy shift, the bank assumes. "In the absence of anything breaking down, it's hard to see why they would do anything here," JPMorgan added.