Wall Street Expert Suggests Interest Rates May Drop Further Than Market Expectations

Fed Rate Cut Predictions

• Morgan Stanley's Outlook: The investment bank's interest rate strategy team suggests that the Federal Reserve may implement more aggressive rate cuts than currently anticipated by the market.
• Projected Rate Cuts: Their baseline forecast includes a 25 basis point cut at the upcoming meeting, with similar reductions expected at each subsequent meeting until December 2026.

Economic Scenarios

• Dovish Assessment: Morgan Stanley's economists have evaluated alternative economic scenarios, concluding that the likelihood of more dovish outcomes is significant, indicating a potential for sharper rate cuts than previously thought.