JPMorgan: "Rates likely on hold for the rest of the year…next move is a hike, most likely in Q3 next year"

Amid persistent differences in market views over the next move in the U.S. Federal Reserve’s policy rate, JPMorgan said it expects rates to be held steady for the remainder of the year and that the next adjustment is more likely to be a hike rather than a cut. The view contrasts with expectations voiced in parts of the digital-asset market for rate cuts within the year.

According to CoinDesk, a cryptocurrency-focused media outlet, JPMorgan forecast the U.S. policy rate will remain in the 3.5–3.75% range this year, and said the next rate adjustment is most likely a 25bp hike in the third quarter of 2027.

JPMorgan said, “The next adjustment in the policy rate is more likely to be a hike than a cut,” adding that “the labor market looks set to tighten again after the second quarter, and disinflation is likely to proceed only gradually.”

The forecast runs counter to expectations in the futures market and among some digital-asset market participants. Chicago Mercantile Exchange (CME) fed funds futures are pricing in the possibility of two 25bp rate cuts this year, and some in the crypto market argue that expectations of easier liquidity conditions could create a more favorable backdrop for Bitcoin.

Lukman Otunuga, senior market analyst at FXTM, said, “Last year wasn’t easy, but Bitcoin could attempt a rebound this year,” adding that “rate cuts and a decline in circulating supply could help support prices.”

Still, JPMorgan left the door open to conditional easing. “If the labor market weakens again over the coming months or inflation falls meaningfully, easing within the year could be revisited,” the bank said, while stressing that its “base case is gradual disinflation and a re-tightening of the labor market.”

A recent U.S. jobs report showing the unemployment rate falling to 4.4% has also prompted revisions to forecasts across the financial sector. Goldman Sachs and Barclays were reported to have flagged the possibility of rate cuts later than previously expected, in September and December.

Market participants say JPMorgan’s latest outlook both sends a cautionary signal against risk-asset optimism predicated on near-term rate-cut expectations and re-emphasizes that uncertainty over the Fed’s policy path remains elevated.