Summary
- Morgan Stanley said it has revised its forecast for the Fed’s policy rate cuts to 25 bp each in June and September this year.
- It noted that this represents a pushback from its earlier projections of rate cuts in January and April.
- It said the Fed is more likely to choose a more cautious monetary policy path in light of the pace of disinflation and trends in the labor market and economic momentum.
Morgan Stanley has revised its outlook for the timing of the U.S. Federal Reserve’s (Fed) policy rate cuts.
According to Walter Bloomberg, a breaking news channel, on the 9th (local time), Morgan Stanley expects the Fed to cut rates by 25 bp (0.25%p) each in June and September this year. This marks a delay from its previously projected rate cuts in January and April.
Morgan Stanley said it sees a higher likelihood the Fed will opt for a more cautious policy path, reflecting that disinflation is proceeding more gradually than expected while the labor market and broader economic momentum remain resilient.
The revised forecast also aligns with a recent trend among major global investment banks to push back the expected start date of the Fed’s rate-cut cycle.
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