Morgan Stanley: The U.S. "jobless productivity boom" will prompt the Federal Reserve to further cut interest rates.

Odaily Planet Daily reports that Morgan Stanley strategists point out that the US economy may be experiencing a "jobless productivity boom," which would curb inflation and open the door for further interest rate cuts by the Federal Reserve. Data from the US Department of Labor shows that hourly output from all non-farm workers increased by 3.3% year-on-year in the second quarter, a significant improvement from the 1.8% year-on-year decline in the previous quarter. Investors' expectations for the pace of Fed rate cuts next year are more aggressive than official forecasts. According to the CME FedWatch tool, Fed officials expect only one rate cut in 2026, but investors believe there is a 72% probability of a rate cut by the end of the year. (Jinshi)