Morgan Stanley: Fed Rate Hikes May Fall Short of Market Expectations

Odaily News: Morgan Stanley interest rate strategists said in a report that after the Fed's September rate hike, it is expected to raise rates once more in December and once in March next year. However, current market pricing suggests that rate hikes over the next year will still be more aggressive. The strategists noted that market uncertainty regarding the Fed, economic growth, corporate bond issuance, and oil price trends is driving up expectations for further monetary policy tightening over the next 12 months. Nevertheless, Morgan Stanley believes the Fed's actual tightening will not reach market expectations, as key factors influencing the Fed's policy path will not become clearer until later this year. According to London Stock Exchange Group (LSEG) data, money markets currently expect the Fed to raise rates by a cumulative 100 basis points over the next 12 months. (Jinshi)