David Kelly, chief global strategist at JPMorgan Asset Management, said in an interview with CNBC that the slowdown in the US economy has become increasingly apparent, and the Fed’s expected interest rate cuts would not change this photo.
Kelly argued that the weaker August employment report and other economic indicators pointed to further softening of the economy, saying, “The economy is slowing, not a recession. All data shows that an already struggling economy is now approaching fatigue.”
Despite market optimism, Kelly argued that interest rate cuts would not drive growth, saying, “We saw the stock market rise today. This clearly reflects the expectations of interest rate cuts. This does not solve the fundamental problem. Lowering interest rates would further reduce interest rate cuts to the market.
Kelly said that experience in the 2000s also proved this, saying, “In the entire 21st century, interest rate cuts have shown that it does not stimulate economic growth. Reducing post-financial crisis was ineffective.
*This is not investment advice.
