Economy·Federal Reserve‘Dust off your rate-cutting playbook,’ JPMorgan tells clients, the evidence for a Fed cut just keeps piling upBy Eleanor PringleBy Eleanor PringleReporterEleanor PringleReporterEleanor Pringle is an award-winning reporter at Fortune covering news, the economy, and personal finance.
Eleanor previously worked as a correspondent and news editor in regional news in the U.K.
She her journalism training with the Press Association after earning a degree from the University of East Anglia.SEE FULL BIO Jerome Powell, chairman of the US Federal Reserve, is widely expected to cut at the next FOMC meeting.Al Drago/Bloomberg - Getty ImagesJobless claims hit their highest level since 2021 last week, adding to recent labor market revisions that have fueled confidence the Fed will cut rates in September.
Despite hotter CPI data, rallied on expectations of easing, with JPMorgan’s Elyse Ausenbaugh and UBS’s Mark Haefele urging investors to prepare portfolios for a rate-cutting cycle.
If needed further evidence for a September rate cut, they got it: initial jobless claims for the first week of September came back as the highest in nearly four years.
The Labor Department revealed Thursday that initial claims rose by 27,000 to 263,000 in the week ending September 6—their highest levels since October 2021.
Many saw the data (compounded by significant revisions to recent jobs reporting from the Bureau of Labor Statistics which painted a far weaker employment picture than previously believed) as further pressure on the Federal Open Market Committee to cut the base rate.
That’s because part of the Fed’s mandate is to ensure stable and maximum employment, an aspect of their work which in recent months has been overshadowed by the fear of inflation—mainly due to President Trump’s tariff plans.
On this account, Powell has agreed with many analysts that he will have to “see through” tariff increases as a one-off blip to price stability as opposed to an trend which will need to be managed.
Which meant yesterday’s Consumer Price Index (CPI) didn’t come with the same level of gravity as it may have done otherwise.
The BLS reported CPI for urban consumers increased 0.4% on a seasonally adjusted basis, up 0.2% from July.
The largest contributor to the increase was shelter, which rose 0.4%, while the food index increased 0.5%, with groceries increasing 0.6% for the month.
But shook off the warmer data: The S&P 500 is up 0.85% at the time of writing, the Dow Jones up 1.36% and the Russell 2000 was up 1.83%.
Despite political volatility in France, Paris’s CAC was only down a marginal 0.45% while London’s FTSE 100 is up around 0.35%.
In Asia Japan’s Nikkei 225 was up apximately 0.9% while India’s Nifty 50 also increased by 0.46%.
are “buoyant” wrote Deutsche Bank’s Jim Reid to clients this morning: “The combined data mpted a rally in U.S.
Treasuries, with 10yr yields falling -6bps lower after the before closing -2.5bp on the day to 4.02% … However, the front-end rally ran out of steam as the day went on and 2yr yields closed a mere -0.1bps lower as remained hesitant to price in much risk of a 50bps cut, with September Fed pricing unchanged at 27bps.” Action for investors With CME’s FedWatch barometer still pricing in a 0.0% chance of a rate hold at the FOMC’s meeting this month, JPMorgan Wealth Management’s Elyse Ausenbaugh, head of investment strategy, said the team had been “encouraging investors to dust off their ‘rate-cutting playbook.'” Ausenbaugh wrote in a note seen by Fortune: “The path for the Fed to der what the market is expecting looks from our perspective.
With inflation ing in-line with expectations and the labor market not giving us signs of imvement, a cut is in order.” She added: “We expect these cuts to happen without a recession.
There’s potential in the evolving environment for continued equity outperformance in the U.S. and abroad.
It’s also important for investors to consider the reinvestment risk associated with holding cash and ultra-short-term fixed income positions.” Over at UBS Mark Haefele, Global Wealth Management chief investment officer, is similarly reminding clients of their to-do list during a base rate cut.
He wrote this morning: “With cash returns set to fall further as the Fed resumes rate cuts, we see a growing need to deploy excess cash into higher-yielding assets.
“Phasing into diversified portfolios over time could also help manage the risk of poor timing, reduce the influence of emotion, and vide more opportunities to benefit from market dips and rebounds.” Here’s a snapshot of the globally this morning: S&P 500 futures were down 0.22% this morning.
STOXX Europe 600 was down 0.18% in early trading. The U.K.’s FTSE 100 was up 0.35% in early trading. Japan’s Nikkei 225 was up 0.89%. China’s CSI 300 was down 0.57%. South Korea’s KOSPI was up 1.54%.
India’s Nifty 50 was up 0.46%. Bitcoin has nudged above $115K.Fortune Global Forum returns Oct. 26–27, 2025 in Riyadh.
CEOs and global leaders will gather for a dynamic, invitation-only event shaping the future of . Apply for an invitation.