According to the committee's median, it is currently only expected to lower interest rates twice in 2025, twice in 2026, and once in 2027.
According to the Zhito Finance APP, Morgan Stanley released a research report stating that the Federal Reserve's interest rate decision in December was more hawkish than previously expected, with the market generally anticipating a 25 basis point reduction in the federal funds rate target range and adjusting the overnight reverse repurchase agreement (ON RRP) rate to the lower limit of the target range.
In addition, the forward guidance provided by the Federal Reserve through the updated economic forecast summary was also more hawkish than anticipated. According to the committee's median, it is currently only expected to lower interest rates twice in 2025, twice in 2026, and once in 2027. Morgan Stanley noted that there is tension between the ongoing inflation predicted and the significantly lower expected rate cuts. If the Federal Reserve revises its view on inflation, the situation would become more reasonable.
