JPMorgan sees 25 point rate cut next week from FOMC

JPMorgan Chief U.S. Economist Michael Feroli expects the Federal Reserve will lower the target range for the fed funds rate by 25 basis points next week to 4.25%-4.50%. The firm is not looking for major changes in the statement language or the forward guidance, even though it still thinks a pause is likely at the January meeting. The economic forecasts will show better growth and firmer inflation this year, and the median interest rate forecast dots will be revised to show three cuts next year instead of four, as in the September dots, the economist contends. JPMorgan believes the longer-run median dot could move up to around 3% or slightly higher. It also expects Fed Chair Jerome Powell will stay away from strong signaling about the January meeting.