Investment bank Morgan Stanley says that the Federal Reserve will begin cutting interest rates starting in September, reversing its prior views of the Fed choosing to hold rates steady through March 2026.
Jerome Powell’s Jackson Hole Speech Shifts The Narrative
This shift comes following Fed Chair Jerome Powell’s speech in Jackson Hole on Friday, which indicated a change in the central bank’s policy, now focusing on the labor market crisis, as opposed to inflation targeting, according to a report by Reuters.
See Also: Opendoor Stock Rallies As Rate Cuts Could ‘Unfreeze’ Housing Market
In a note published on Monday, the bank forecasted a 25 basis-point rate cut in September, followed by a steady easing schedule with another cut in December, and quarterly reductions all through 2026, hitting a terminal rate of 2.75% to 3.00%, from …