Oil price surge impacts market rate cut expectations, Morgan Stanley: Still expects the Federal Reserve to lower rates in June

On March 16, Michael Gapen, Chief US Economist at Morgan Stanley, stated during a Bloomberg News roundtable in New York: "We still believe June and September, although there is certainly a risk of delay." This forecast contrasts with market pricing. The surge in oil prices following the outbreak of the Iran war may lead to a resurgence in inflation, potentially limiting the Federal Reserve's room to ease monetary policy, and the market has quickly lowered its expectations for interest rate cuts.