While everyone is expecting an Interest rate cut in September, Morgan Stanley made a surprising forecast! They revealed their predictions for 2025 and 2026!

FED has paused interest rate cuts since January and preferred to keep interest rates stable at 4.25% - 4.5%.

The FED, while keeping interest rates unchanged in June, has left hopes for interest rate cuts to July and September.

At this point, FED Chairman Jerome Powell stated that concerns about tariffs continue, that they will continue to adhere to the data, and that they will make decisions based on the data, while some FED members announced that they supported a rate rebate in July.

As uncertainty regarding interest rate rebates continues***, Morgan Stanley*** has announced its forecasts.

According to this, Morgan Stanley stated that it does not expect a rate cut from the FED in 2025, but expects 7 rate cuts in 2026.

Morgan Stanley predicts that the FED will start interest rate cuts in 2026 and will implement a total of seven rate cuts throughout the year, forecasting that the final interest rate will decline to a range of 2.5-2.75 percent by the end of 2026.

It Does Not Align with the Fed's Interest Rate Forecast!

The latest dot plot released by the FED in June is found to be quite different from Morgan Stanley's forecast.

According to this chart, the FED expects two interest rate cuts for 2025, and only one interest rate cut in 2026.

However, Morgan Stanley does not agree with this view and predicts that there will be no rebates next year, while seven rate cuts will be made in 2026.

*It is not investment advice.

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