JPMorgan: Markets Fear Pricing No Fed Rate Cut, Downgrades Emerging Market Currencies to "Hold"

JP Morgan lowered its view on emerging market currencies and local interest rates after the U.S. released a higher-than-expected CPI rise in March, leading financial markets to expect the Federal Reserve to delay a rate cut until September. JPMorgan said, "At this point on, the likelihood of the Fed not cutting rates becomes sufficiently high that markets will reprice, pushing up risk-free rates and limiting the performance of emerging market currencies or the ability of emerging market rates to continue to resist the rise." JPMorgan Chase said it had adjusted its weighting on emerging market foreign exchange to "hold" from "add" on the UAE.