It will be 2027 before that time comes, according to the new Morgan Stanley forecast, which was published after an unexpectedly hawkish interest rate announcement from Fed Chair Jerome Powell.
The first cut of 0.25 percentage points is now expected in January 2027, followed by an equal cut in March of the same year. Previously, the investment bank's economists had expected a cut in September and another in December of this year.
Morgan Stanley - one of the heavyweights on Wall Street - justifies its forecast change by pointing to high inflation, a US economy that is showing resilience, and the Fed's indication in Wednesday's interest rate announcement that it is prepared to wait with interest rate cuts.
