JPMorgan's latest comments on the Fed's rate cut have caused serious concern among traders and investors around the world. Today, despite expectations of a sharp interest rate cut, JPMorgan's head of global and European equity strategy dismissed the chances of a bull market in the future. The statement quickly sparked a global debate as the stock and crypto markets anticipate sentimental shifts in the future.

JPMorgan Analyst Remains Bearish on Market Future

According to a recent Fortune report from September 3, Mislav Matejka's team stated: "Any policy easing would be in response to the growth slowdown, making it a 'reactive' contraction." This statement from the JPMorgan team is primarily related to expectations of a sharp Fed rate cut in connection with the upcoming September meeting.

The report said seasonality is another hurdle, with September historically the worst month for U.S. equities. “We’re not out of it yet,” Matejka said. “Sentiment and positioning indicators are looking far from attractive, political and geopolitical uncertainty is rising, and seasonal conditions will be more challenging again in September,” he added.

Meanwhile, the S&P 500 has rebounded from its early August decline to reach a record high on expectations that the Federal Reserve will begin cutting interest rates at its next meeting on Sept. 17-18. The MSCI All-Country World Index, a global stock index, is also currently at an all-time high. Meanwhile, the S&P 500 is up 1% today.

While the broader market remains optimistic about the Fed's rate cut in September, its broader impact is expected to stall the stock market's move near record highs, according to the JPMorgan team mentioned above. The crypto market is also expecting further turbulence due to upcoming U.S. employment data.

Cryptocurrency Market Braces for Impact

Notably, the cryptocurrency market has reacted skeptically to the news of the JPMorgan Fed rate cut. Industry participants are expressing concern that the cryptocurrency market is showing sluggish performance despite expectations of a rate cut.

BitMEX co-founder Arthur Hayes spoke to X today to explain why the September rate cut is not true. According to Hayes, BTC has fallen 10% since the Jackson Hole rate cut was hinted at. This market reaction contrasts with the usual expectation that risk assets gain momentum when rates are cut. A recent Bitcoin price analysis from CoinGape also suggests that the flagship coin could bounce off lower support at $53,500 or even $50,000, solidifying future moves.

For context, Hayes shows that the effectiveness of the RRP mechanism compared to the T-bills is to divert funds away from risky assets. This explains why the market does not benefit from the current rate cut scenario. The RRP (reverse repo) mechanism allows financial institutions to deposit money with the Fed for repayment.

Meanwhile, JPMorgan's remarks have created a stir in the wider industry, rationalizing the current crypto market movement.