JPMorgan’s David Kelly sees disinflation trend building in the US

David Kelly, the chief global strategist at J.P. Morgan Asset Management, is making the case that the US is entering a sustained period of disinflation. His argument rests on two pillars: reduced tariff pressures and the expectation that oil will flow more freely through the Strait of Hormuz as geopolitical tensions ease. The disinflation thesis Kelly’s view isn’t a sudden revelation. It’s the product of months of analysis that has been building through J.P. Morgan’s 2026 economic outlook. Back in June, the firm projected that CPI inflation could decrease through the year, contingent on improvements across several key areas: energy prices, tariff effects, shelter costs, and wage growth. Then there’s oil. The Strait of Hormuz, that narrow waterway between Iran and Oman through which roughly a fifth of the world’s petroleum passes daily, has been a recurring source of supply anxiety. Tensions involving Iran earlier in 2026 temporarily pushed oil prices higher, adding upward pressure to inflation forecasts. Kelly’s view is that this pressure is fading as supply normalizes. In a CNBC interview on August 7, Kelly analyzed the broader economic landscape alongside the July jobs report, we...