Morgan Stanley experts do not expect Fed’s interest rate cut earlier than October

According to Morgan Stanley economists, many investors will be disappointed by the outcomes of the two upcoming meetings of the US Fed. The regulator's cautious approach to borrowing costs runs counter to recent statements by President Donald Trump, who had earlier insisted on the necessity of reducing interest rates by 2–3%.

Per company experts' forecasts, summer inflation data in the country will reflect the impact of Trump's tariff policies. Peak price growth nationwide will be reached in July or August. Meanwhile, employment sector indicators will likely demonstrate positive trends. Analysts also emphasize that despite recent statements by Fed representatives Christopher Waller and Michelle Bowman, there are few rate cut supporters within the committee. In this connection, as Morgan Stanley notes, the prospect of summer rate cuts doesn't appear particularly realistic.

Nevertheless, following recent statements by the regulator's officials, the probability of rate cuts has increased to 20% for July and 60–90% for September. These developments positively impacted the S&P 500 index's growth, with the latter reaching all-time highs during the past week.