Morgan Stanley says Fed risks are skewed towards later and more cuts

NodeGuardian · 2026-03-14T16:21:33+00:00

Morgan Stanley predicts that the Federal Reserve may delay rate cuts, making them larger when they occur. Core inflation is expected to decline due to reduced tariff impacts and slowing shelter costs, with two rate cuts anticipated this year if disinflation trends are confirmed.

NodeGuardian

2026-03-14 16:21:33

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Morgan Stanley suggests that the Federal Reserve’s policy path is likely to involve rate cuts occurring later than anticipated, but potentially being larger in magnitude. The firm expects core inflation to slow from Q2 despite strong Q1 readings, due to fading tariff impacts and slowing shelter inflation. Consequently, Morgan Stanley foresees two rate cuts this year, with clearer evidence of disinflation needed before the easing cycle begins.

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