Morgan Stanley Revises Forecast, Expects Fed Rate Cut in December

Deep News12-05 21:11

Economists at Morgan Stanley stated in a report that, based on policymakers' signals, "near-certain market pricing, and the Fed's historical reluctance to surprise markets," they have revised their forecast to predict a Federal Reserve rate cut next week.

The economists reverted to their earlier projection of three 25-basis-point cuts in December, January, and April, which would lower the federal funds target rate range to 3%-3.25%.

A team led by Michael Gapen had previously withdrawn their December rate-cut forecast on November 20, citing a rebound in job growth reflected in delayed September employment data.

On Friday, they wrote, "It appears we acted prematurely."

Meanwhile, market expectations for a Fed rate cut on December 10 have risen to approximately 90%.

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