Sep 9, 2025
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JPMorgan Cautions Clients That Fed Rate Cut May Trigger Market Decline
JPMorgan's US trading desk warns that the anticipated Federal Reserve rate cut on September 17 may signal a peak for risk assets, including cryptocurrencies. The bank suggests investors might sell off in reaction to macro data and reduced retail participation.
Key points from the analysis include:
- The Fed is expected to announce a 25 basis point cut, which could lead to a "Sell the News" scenario.
- Standard Chartered predicts a 50 basis point cut due to rapid cooling in the labor market, with nonfarm payrolls rising only 22,000 in August.
- JPMorgan maintains a "lower-conviction Tactical Bullish" stance but advises hedging against potential volatility.
- Concerns are raised about a growth scare despite expectations for policy easing, as the unemployment rate has reached a near four-year high.
For cryptocurrency, two scenarios are possible:
- A favorable 50 basis point cut could support bitcoin and altcoins by compressing real yields and weakening the dollar.
- A smaller cut might trigger a sell-off in crypto assets, aligning with JPMorgan’s concerns.
As of the latest update, Bitcoin is priced at $112,739.
