Macquarie Revises Fed Rate Cut Outlook to September and October

Morgan Stanley now predicts the Federal Reserve will cut interest rates by 25 basis points at each of its remaining three meetings this year, a shift from its previous forecast.

Summary

Morgan Stanley has adjusted its Federal Reserve rate cut forecast, expecting three consecutive 25 basis point reductions at the remaining meetings this year, instead of the previously projected two cuts in September and December. The bank now also anticipates further cuts in 2026.

Terms & Concepts
  • Basis Point (bps): A unit of measure equal to 0.01%, commonly used to describe changes in interest rates or yields.
  • Federal Reserve Rate Cut: A reduction in the benchmark interest rate set by the U.S. Federal Reserve, intended to influence economic activity and inflation.
  • Monetary Policy Forecast: An economic projection outlining expected actions by central banks regarding interest rates and liquidity conditions.