TechFlow News, March 19: According to JINSHI Data, on Thursday, Morgan Stanley joined Goldman Sachs and Barclays in pushing back its expectation for the Federal Reserve’s next interest-rate cut—from June to September—citing the Fed’s recent warning about inflation risks amid escalating Middle East tensions. Morgan Stanley now forecasts two 25-basis-point cuts, in September and December, revising its prior forecast of cuts in June and September. As expected, the Fed held rates steady on Wednesday; in his post-meeting press conference, Fed Chair Jerome Powell stated, “In the near term, rising energy prices will push up overall inflation, but it is still too early to assess the scope and duration of their potential impact on the economy.” The latest projections from Fed policymakers indicate that rates will fall by only 25 basis points by year-end. Meanwhile, major Wall Street investment banks still anticipate two rate cuts. In its report, Morgan Stanley strategists noted: “The Fed’s cautious stance implies a delayed start to easing. The primary risk to our view remains that rate cuts arrive later than expected—or possibly not at all. Conversely, a second surge in oil prices could weaken economic activity and the labor market, thereby prompting rate cuts.”
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