A leading J.P. Morgan economist has recently signalled a shift in the firm’s expectations for the Federal Reserve’s near-term moves. The bank now expects a 25-basis-point rate cut by the Fed at the upcoming meeting — reversing its earlier view that policymakers would hold fire until early next year.

This change in forecast reflects growing signs that economic conditions may be weakening and that recent comments from influential Fed officials have tilted sentiment toward easing. The implication: if the Fed does cut rates, it could ease borrowing costs, spur risk-asset demand, and potentially inject fresh liquidity into markets — a welcome boost for investors wary of tight financial conditions.

That said, J.P. Morgan’s research team cautions that this may not mark the start of a prolonged easing cycle. Rather, they describe it as a modest adjustment — a tactical move shaped by evolving macroeconomic signals and expectations around inflation, employment, and growth.

For investors and market watchers, this underscores how sensitive policy expectations remain to economic data. Markets may respond quickly to both the Fed’s actions and its forward guidance. While a rate cut could temporarily support equities and risk assets, uncertainty around future economic momentum and inflation risks means the path ahead is far from assured.

In short: J.P. Morgan’s revised view reflects growing confidence that the Fed could ease soon — but also serves as a reminder that even such forecasts must contend with shifting data and uncertain global conditions.