JPMorgan Predicts Four Consecutive Rate Cuts by the Federal Reserve

J.P. Morgan expects the Federal Reserve to cut interest rates by 25 basis points at each of its next four meetings, bringing the policy rate to 3.5%. The brokerage also noted a potential shift in Fed leadership with President Trump's nomination of economist Stephen Miran to replace Governor Adriana Kugler, which could lead to deeper institutional reforms at the central bank.

J.P. Morgan has revised its expectations for the Federal Reserve's interest rate policy, predicting four consecutive 25 basis point cuts at the next four meetings. This would bring the policy rate down to 3.5% [1]. The brokerage cited signs of labor market weakness and uncertainty surrounding President Donald Trump's latest Fed nomination as reasons for the revised outlook.

The Federal Reserve's decision to cut rates may hinge on the August jobs data. An unemployment rate of 4.4% or higher could justify a larger cut, while a lower reading may prompt resistance from policymakers focused on inflation [1]. Additionally, the Fed's decision may be influenced by the potential confirmation of Stephen Miran, nominated by Trump to replace outgoing Governor Adriana Kugler. Miran's appointment could increase divisions within the rate-setting committee, potentially leading to deeper institutional reforms at the central bank [1].

The Federal Reserve has been under pressure from Trump to cut rates, with the president often clashing with Chair Jerome Powell over keeping policy tight. The nomination of Miran, a Harvard Ph.D. and former chair of the Council of Economic Advisers, reflects Trump's desire to influence the central bank's monetary policy [3].

Separately, J.P. Morgan noted that Fed Governor Christopher Waller is emerging as the frontrunner to succeed Jerome Powell as Fed Chair. Analysts at Barclays echoed this sentiment, suggesting that Waller's appointment would reduce uncertainty around the Fed's response to economic data, potentially supporting longer-dated bonds [1].

Traders now price in a 91.4% chance of a rate cut in September, compared with 37.7% last week, according to CME Group's FedWatch tool [1]. This higher probability of a rate cut in September may lead to changes in CD rates, with some banks already making adjustments in anticipation of further cuts [2].

The current CD rate prediction for August is that rates are likely to hold steady as the Fed maintains the federal funds rate. However, with potential rate cuts down the line, CD account interest rates may start to drop soon, so if you want to take advantage of the highest rates, now might be a good time to do so [2].

References:
[1] https://www.reuters.com/business/jpmorgan-brings-forward-fed-rate-cut-forecast-september-2025-08-08/
[2] https://www.cbsnews.com/news/will-cd-rates-rise-or-fall-august-2025-experts-share-predictions/
[3] https://www.thestreet.com/fed/trump-makes-surprise-decision-on-federal-reserve-