After Powell changed his tone, Morgan Stanley expects the Federal Reserve to cut interest rates in September
Morgan Stanley expects the Federal Reserve to cut interest rates by 25 basis points in September, as Powell changed his tone at the Jackson Hole meeting, emphasizing risks in the labor market. Previously, the market generally believed that the Federal Reserve would keep interest rates unchanged until March 2026. The brokerage also predicts another rate cut in December and quarterly cuts in 2026, with a terminal rate target range of 2.75%-3.0%
On August 26, Reuters -
After Federal Reserve Chairman Jerome Powell signaled a shift in focus to labor market risks in his speech at the Jackson Hole meeting, Morgan Stanley expects the Federal Reserve to begin cutting interest rates in September, whereas the previous view was that the Fed would hold steady until March 2026. The brokerage predicted in a report on Monday that the Fed would cut rates by 25 basis points in September, followed by another cut in December, and then cut rates once each quarter in 2026, with a terminal rate target range expected to be 2.75%-3.0%. (End)
