Svmuu News: Morgan Stanley strategists said in a report that recent data suggests the Federal Reserve will hold off on raising rates at its July meeting and is likely to keep rates unchanged for the remainder of the year. They wrote: “The Fed is losing patience with inflation that remains above target.
The trajectory of inflation in the coming months will be critical—we expect inflation to ease as anticipated—otherwise, the Fed may shift to raising rates later this year.” Currently, the money markets have priced in expectations of nearly two rate hikes by the Fed before the end of the year. However, the trend of slowing inflation may prompt the Fed to keep rates unchanged this year, maintaining the federal funds rate within the 3.50% to 3.75% range. “We expect the trend of declining inflation to keep the Fed on hold this year.” (Jin Shi)