JPMorgan analysts warn that the Federal Reserve's rate cut could hurt stocks and bonds

Kelly, chief global strategist at JPMorgan Asset Management, said the widely expected rate cut will increase risks for stocks, bonds and the dollar if it is believed that the Fed cut interest rates this week because of political pressure and does not match the Fed's forecasts for the economy. Bond and equity investors on Wall Street have been cheering for the Fed's potential to resume rate cuts after a nine-month pause, but they should take a cautious stance and seek to diversify after the recent rally, Kelly wrote. "To some extent, the Fed's decision this week is seen as a capitulation to political pressure, which adds new risks to the U.S. financial marekt and the dollar," Kelly said. " There is a bubble in the market "and easing now is more likely to weaken demand than increase it," ultimately bad for stocks, bonds and the dollar ".