JPMorgan strategist: Fed rate cuts unlikely to reverse economic slowdown

David Kelly, chief market strategist at JPMorgan Asset Management, sees signs of a gradual slowdown in the U.S. economy, which he expects to put pressure on cyclical sectors such as manufacturing or retail. He says a lower base rate is unlikely to reverse that. "I think stock market investors are just misinterpreting the situation if they think a rate cut is going to do any good for the overall direction of the economy and profitability. When the Fed cuts rates, it cuts interest income, it convinces people that there are more rate cuts to come, so they should wait a while before borrowing, and it convinces people that the Fed is afraid of a recession - so they start to fear a recession."