Brokerages split on 2025 US rate path after Morgan Stanley revises outlook
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Morgan Stanley has revised its outlook for U.S. monetary policy, now expecting the Federal Reserve to deliver a quarter-percentage-point rate cut at its December meeting. The shift aligns the firm with J.P. Morgan and BofA Global Research, both of which have also turned dovish following recent signals from central bank policymakers. All three brokerages had previously forecast that the Fed would keep rates unchanged in December. The change in sentiment comes on the back of softer U.S. economic data released in late November and a series of dovish remarks from influential Federal Reserve officials. Comments from New York Fed President and FOMC Vice Chair John Williams, Fed Governor Christopher Waller, and San Francisco Fed President Mary Daly have strengthened expectations that policymakers are preparing to ease. Market pricing has quickly adjusted. Traders now assign an 87.2% probability of a quarter-point cut at the December 9–10 policy ...