JPMorgan Chase has mapped out five scenarios for the Federal Reserve's upcoming rate decision, with a hawkish hold seen as the most likely outcome at a 50 percent probability. In that baseline case, where the Fed pauses but warns on persistent inflation, the S&P 500 would likely move between a 0.25 percent gain and a 0.5 percent loss. A dovish hold, assigned a 28 percent chance, could trigger a relief rally of up to 1 percent, while a surprise quarter-point rate hike, given a 20 percent probability, could knock the S&P 500 down by 1.5 to 2 percent, with the Nasdaq facing potentially double those losses. An extreme half-point hike, at just 1 percent odds, could spark a 2 to 4 percent plunge, and an unexpected rate cut could swing the market between a 1 percent loss and a 1.5 percent gain on fears of hidden economic weakness. JPMorgan's chief U.S. economist Michael Feroli expects the Fed to hold rates steady but warns of at least two hawkish dissents from officials including Beth Hammack and Lorie Logan.
JPMorgan Chase & CoJPMorgan is the source of the analysis, not the subject; the scenarios affect markets broadly, with no direct impact on JPMorgan's own business.