“Morgan Stanley”: US price data reduces possibility of cutting interest rates in June

Morgan Stanley said that US price data reduces the possibility of a cut in interest rates next June. The Federal Reserve is likely to begin reducing interest rates next September.

Summer data should begin to show that inflation is finally under control, prompting the Fed to make its first of three interest rate cuts this year.

“Higher-than-expected inflation in the first quarter of 2024 reinforced the Fed’s caution and led to a rollback of the interest rate cuts we had previously expected in July,” the bank said in a note.

A slowdown in inflation in the second half of the year should give the Fed the confidence to move to lower interest rates.

Investors, consumers and business leaders are closely following the US Federal Reserve’s interpretation of economic data, waiting for the moment when the economy slows enough to allow the Fed to cut interest rates for the first time since it began raising them in March 2022, So far.