Huoxing Finance reports that on September 4, Morgan Stanley anticipated that, despite Federal Reserve Chair Powell’s hawkish signals at the Jackson Hole symposium, the Fed will hold interest rates steady. Current inflation data may provide justification for the Fed to maintain patience. The bank expects U.S. core CPI to rise 0.23% month-over-month in August and core PCE to increase 0.20% month-over-month. Additionally, revisions to PCE data could lower the year-over-year core PCE growth rate from 3.3% to approximately 3.1%, further supporting a pause in rate adjustments. Powell’s hawkish language is more likely intended to preserve policy flexibility rather than signal the imminent start of a new tightening cycle.
Morgan Stanley: Fed to Keep Rates Unchanged Despite Powell’s Hawkish Signals
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Summary
Morgan Stanley says the Fed will hold rates steady despite Powell’s hawkish remarks at Jackson Hole. The bank forecasts August core CPI rising 0.23% and core PCE rising 0.20% month-over-month. A downward revision to PCE could push annual growth to 3.1%, supporting a delay in rate moves. Powell’s tone may aim to preserve policy flexibility. Meanwhile, global regulators such as the EU’s MiCA and CFT measures continue to shape the macro environment for markets.
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