TechFlow, September 3 — According to Jinshi Data, Morgan Stanley revised its forecast at the end of August regarding two rate cuts by the Federal Reserve this year. They reiterated their expectation for a Fed rate cut in September but warned that it is not yet certain.
Morgan Stanley pointed out that strong employment figures or a significant rise in inflation driven by tariffs could delay the Fed's plans to cut rates this month. They added that internal debate within the Fed also poses an obstacle, with potential disagreements as some policymakers may believe the central bank is moving too hastily toward rate cuts.
On the other hand, a sharp decline in employment numbers, combined with market bets on a preemptive rate cut, could force the Fed to act more quickly. Nevertheless, Morgan Stanley still believes the Fed will continue on a dovish path next year. The firm maintains its assumption of one quarterly rate cut in 2026, leading to a terminal rate of 2.75% to 3.00%.
