JPMorgan’s Kelly Warns Fed Cuts Risk Hurting Stocks and Bonds

The Federal Reserve’s widely expected interest rate cut this week will increase risks for stocks, bonds and the dollar if it’s perceived to be driven by political pressure and doesn’t align with the central bank’s forecasts for the economy, according to David Kelly, chief global strategist at JPMorgan Asset Management.

Wall Street bond and stock investors, who have been cheering over the Fed’s expected resumption of interest rate cuts after a nine month pause, should instead take a cautious stance and look to diversify after the recent rally, Kelly wrote in a note Monday.