The FED has paused interest rate cuts since January and preferred to keep interest rates constant at 4.25%-4.5%.
The FED last kept interest rates steady in June, while hopes of a rate cut were postponed to July and September.
At this point, FED Chairman Jerome Powell stated that concerns about tariffs continue, that they will continue to depend on the data and make decisions according to the data, while some FED members announced that they support a rate cut in July.
As uncertainty about interest rate cuts continues, Morgan Stanley has announced its forecast.
Accordingly, Morgan Stanley stated that it does not expect the FED to cut interest rates in 2025, but expects 7 interest rate cuts in 2026.
Morgan Stanley, which predicts that the FED will start cutting interest rates in 2026 and will make a total of seven interest rate cuts throughout the year, predicts that the final interest rate will fall to the range of 2.5-2.75 percent by the end of 2026.
Does Not Match FED's Interest Rate Forecast!
The latest dot chart published by the FED in June is quite different from Morgan Stanley's forecast.
According to this chart, the FED expects two rate cuts in 2025 and only one in 2026.
However, Morgan Stanley does not agree with this view and predicts that there will be no reduction next year and that there will be 7 interest rate cuts in 2026.
*This is not investment advice.