Morgan Stanley: Fed Rate Hikes May Be Smaller Than Market Expectations

Odaily News: Morgan Stanley interest rate strategists stated in a report that after the Fed's September rate hike, it is expected to raise rates once each in December and March next year. However, current market pricing shows that rate hikes over the next year will still be more aggressive. The strategists pointed out that market uncertainty regarding the Fed, economic growth, corporate debt issuance, and oil price trends is pushing up expectations for further monetary policy tightening over the next 12 months. However, Morgan Stanley believes that the actual tightening by the Fed will not reach market expectations, because the key factors affecting 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)