For some context, they had previously forecast the Fed to cut just once more this year and that was for December. Their previous call also showed 50 bps rate cuts in Q1 2026. So, this is very much an acceleration of that. I would argue that worsening labour market conditions is playing a key role in that regard but I think everyone is sharing the same view now.
As things stand, Fed funds futures are pricing in ~59 bps of rate cuts through to year-end. So, JP Morgan's call is more on the dovish side and could yet be reaffirmed if jobs data continues to soften in Q3 this year.
