The US Federal Reserve (Fed) will announce its key October interest rate decision tomorrow. As the world awaits the Fed's decision, the market is pricing in a 25 basis point rate cut at 97.8%.
Ahead of the Fed meeting, which is eagerly awaited by global markets, including the crypto market, Morgan Stanley announced that it expects the Fed to cut interest rates by 25 basis points this week to a range of 3.75-4.00%, in line with prevailing market expectations.
The report, written by Morgan Stanley economists, said the lack of release of key U.S. economic data due to the government shutdown does not preclude the Fed's decision to cut interest rates.
Economists say the Fed will continue to signal the possibility of further rate cuts by maintaining an “accommodative trend,” but the government shutdown will create uncertainty about the Fed's decisions in December and next year.
Therefore, Morgan Stanley said it expects Fed Chairman Jerome Powell to maintain a “data dependent” stance and that the easing signal will continue.
Morgan Stanley is projecting uncertainty about upcoming meetings and interest rate decisions, while financial institutions including Bank of America (BofA), CIBC and RBC are predicting the Fed will pause and pause rate cuts at its next meeting this week following its October rate cut.
*This is not investment advice.
