JPMorgan: The Federal Reserve's mistake in cutting interest rates is approaching, and the US stock, bond, and currency markets may face a massive shock.

Odaily News The market’s expectation for a rate cut by The Federal Reserve (FED) is on the rise, but JPMorgan’s London strategy team has poured a bucket of cold water on this optimism. The bank warns that the true reasons behind a rate cut may not be favourable for the stock market and could even lead to a “misguided type of easing,” triggering a chain reaction in the market. JPMorgan’s strategists expect a combination of the first and third scenarios in the future—namely, a slowdown in economic activity while inflation rises. They point out that since 1980, the dollar typically weakens before a rate cut and continues to fall afterwards. Bond yields also decline as a result. JPMorgan’s strategists indicate that they expect the dollar to hit new lows in most cases, and US Treasury yields to continue to decline. (Jin10)