#FedDovishNow Morgan Stanley, a major US bank, has changed its outlook on the September interest rate meeting.
Morgan Stanley has updated its forecast: The Fed will cut interest rates by 0.25% in September, another 0.25% in December, and consistently by 0.25% every quarter until the end of 2026, bringing the baseline interest rate to a range of 2.75% – 3.0%.
This is a significant change as the bank previously believed that The Fed would remain silent until March 2026.
The reason is that Powell's tone at Jackson Hole has shifted, focusing less on persistent inflation or low unemployment and more on the possibility of The Fed acting earlier to prevent a weakening labor market.
Powell's speech at Jackson Hole has caused many major players, such as Barclays, BNP Paribas, and Deutsche Bank, to simultaneously forecast a 0.25% Fed cut in September. Only BofA maintains its view that The Fed will not change interest rates this year. every buy now
Morgan Stanley has updated its forecast: The Fed will cut interest rates by 0.25% in September, another 0.25% in December, and consistently by 0.25% every quarter until the end of 2026, bringing the baseline interest rate to a range of 2.75% – 3.0%.
This is a significant change as the bank previously believed that The Fed would remain silent until March 2026.
The reason is that Powell's tone at Jackson Hole has shifted, focusing less on persistent inflation or low unemployment and more on the possibility of The Fed acting earlier to prevent a weakening labor market.
Powell's speech at Jackson Hole has caused many major players, such as Barclays, BNP Paribas, and Deutsche Bank, to simultaneously forecast a 0.25% Fed cut in September. Only BofA maintains its view that The Fed will not change interest rates this year. every buy now
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