Don't buy stocks yet but watch for the Fed to pause hikes soon: JPMorgan

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Don't snap up stocks just yet – but stay alert as the Fed could soon spark a rally by wrapping up its rate-hiking campaign, a JPMorgan strategist says

Investors shouldn't be buying US stocks yet – but they should be on high alert for when the Federal Reserve wraps up its interest rate-hiking campaign, according to a strategist at JPMorgan Asset Management.

"What's the benefit of them continuing to move so aggressively, if the cost of those hikes puts undue uncertainty on the economy in a world where inflation is moving in the right direction?" Camporeale toldThe Fed's aggressive rate increases — which saw the cost of borrowing rise from near-zero in March to the current level of around 4.5%, an addition of 450 basis points in total — have weighed on stocks.

"We're still underweight right now, because the Fed last year did the quickest monetary tightening that they have ever done," he said.

 

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