The Federal Reserve's expectation of interest rate cuts cooling down, Morgan Stanley reveals subtle changes in the market

Recently, the US economy seems to have entered a subtle period of adjustment, and market expectations for the Federal Reserve's interest rate cuts have also fluctuated accordingly. However, at this time full of variables, Morgan Stanley, with its consistent conservatism and professionalism, made its unique prediction: the possibility of the Federal Reserve cutting interest rates in July remains very slim.

In recent reports, the Morgan Stanley team conducted an in-depth analysis of the current market trends. They pointed out that although the series of economic data released this week has raised market expectations for the number of interest rate cuts this year, the Federal Reserve clearly needs more concrete evidence to support its decisions. Therefore, Da Mo predicts that the Federal Reserve may maintain interest rates as planned, at least until September.

Firstly, this prediction is not groundless, but based on a profound insight into the volatility of economic data. From April's employment data to this week's retail report, the performance of the US economy can be described as mixed, with both exciting highlights and worrying concerns. This subtle change is like a lighthouse in the mist, sometimes bright and sometimes dim, making it difficult to grasp.

Secondly, in terms of inflation, Morgan Stanley has also provided its own insights. Although the significant increase in the first quarter has attracted widespread market attention, inflation seems to have gradually returned to normal over time. The data from April shows that inflation is gradually falling, and the growth rate of core personal consumption expenditure (PCE) inflation has also slowed down. However, this does not mean that inflation has been completely eliminated. Diego Anzoategui, an analyst at Morgan Stanley, warns that inflation in the first quarter of 2024 may accelerate again, which will have a significant impact on the Federal Reserve's decisions.

However, in this context, Morgan Stanley's cooling of interest rate cuts is particularly reasonable. They believe that although the market is eagerly anticipating interest rate cuts, the Federal Reserve needs to consider multiple factors when making decisions, including inflation trends, economic growth prospects, and financial market conditions. Therefore, in the absence of sufficient conclusive evidence, it is more prudent for the Federal Reserve to choose to maintain interest rates unchanged.

Of course, this does not mean that the Federal Reserve will always maintain a wait-and-see attitude. With further economic development and gradual accumulation of data, the Federal Reserve may adjust its policy stance according to the new situation. Morgan Stanley will continue to closely monitor market dynamics and economic data changes, providing investors with timely and accurate market analysis and forecasts.

Overall, Morgan Stanley's prediction of the possibility of the Federal Reserve's interest rate cut in July has shown a formal and appropriate attitude. They not only respect the expectations and demands of the market, but also value the importance of data and evidence. In such an uncertain period, this stable and professional attitude undoubtedly provides investors with a valuable reference and guidance.

In the future, we look forward to Morgan Stanley continuing to leverage its professional advantages to provide more in-depth and accurate analysis and forecasting for the market. At the same time, we also hope that the Federal Reserve can flexibly adjust its policy stance according to the actual situation, and Morgan Stanley, as an important observer of the market, will continue to provide valuable references for investors with its unique perspective and in-depth analysis.