Morgan Stanley revises Fed rate cut forecast amid tariff uncertainty

Published On Feb 5, 2025, 5:18 AM

Morgan Stanley has revised its forecast for interest rate cuts by the U.S. Federal Reserve, now predicting only a single cut of 25 basis points this year, down from earlier expectations of two cuts. This change is influenced by the uncertainty surrounding President Trump's tariff policies, which are seen as potentially driving inflation higher, complicating the Fed's decisions on monetary policy. The outlook remains uncertain as inflation pressures persist, which affects the Fed's ability to reduce interest rates.