JPMorgan strategist Fabio Bassi anticipates a modest 25 basis point interest rate reduction by the Federal Reserve at its upcoming September meeting. Despite weak employment data, persistent inflation remains a key factor influencing this decision. While an aggressive 50 basis point cut is deemed unlikely, Bassi points to a higher-than-expected risk of a recession at 40%. Interestingly, markets anticipate a more limited easing of growth risks, while political pressure regarding Fed member Lisa Cook’s dismissal underscores the Fed’s continued independence. If economic weakness proves temporary, a shallow rate cut is expected with a restrained pullback in risky assets and a strong dollar predicted.