David Kelly, chief global strategist at JP Morgan Asset Management, said the Fed
should hold rates and does not need to raise them, expecting inflation to taper
gradually as evidence mounts that a persistent wage‑price spiral is unlikely.
After July’s CPI showed moderate core inflation, US Treasuries extended gains.
Kelly cited three disinflationary forces: tariff-related costs should fall on a
year‑on‑year basis; oil prices are likely to retreat as markets grow optimistic
the Iran war will end; and wage growth continues to lag inflation, weakening the
feedback loop that would sustain price pressures. He added markets are highly
leveraged, so even small rate rises could trigger asset repricing.
