Morgan Stanley: The Federal Reserve will cut rates 7 times in 2026, with the final Intrerest Rate dropping to between 2.5% and 2.75%.

Morgan Stanley's latest forecast indicates that the Federal Reserve may begin a rate-cutting cycle in March 2026, with an expectation of continuing to cut rates 7 times throughout the year until the Intrerest Rate falls to a range of 2.5%-2.75%.

The current federal funds Intrerest Rate remains at 4.25%-4.5%. Although dovish signals were released as early as the March Federal Reserve meeting, the recent inflationary pressures brought about by tariff policies have also forced the Federal Reserve to remain cautious.

Michael Gapen, Chief Economist at Morgan Stanley, stated that the new tariff policy will drive up inflation in the next 3-6 months, which has also prompted the bank to delay its interest rate cut timeline from June 2025 to March 2026. At the same time, the analysis also suggests that the GDP growth rate for 2025 has been downgraded from the March forecast of 2.0% to 1.4%, significantly lower than the expected 2.8% for 2024.

If the interest rate cuts as expected, market liquidity is likely to significantly increase, and risk assets may迎来新一轮上涨行情. Historically, low interest rate environments often encourage investors to turn to high-risk assets such as Bitcoin.

In addition, the recent continuous influx of funds into Bitcoin ETFs reflects, to some extent, the market's anticipation and response to expectations of interest rate cuts.

However, the Federal Reserve's real-time assessment of inflation trends will ultimately determine the direction of policy, especially in the current economic situation filled with uncertainty.

Overall, Morgan Stanley's forecast for interest rate cuts in 2026 highlights its optimistic outlook on the economic prospects. The institution expects that this series of rate cuts will effectively control inflation while also providing strong support for economic growth.

However, the Federal Reserve's subsequent actions are undoubtedly the focus of close attention in the market, as its Intrerest Rate decisions and implementation effects will also become key factors in assessing the overall economic direction.

#摩根士丹利 # Interest Rate Prediction #GDP Growth Rate