The Federal Reserve's latest meeting concluded with a quarter-point rate cut, which met market expectations. However, the Fed signaled that future rate cuts in 2025 and 2026 will likely be slower than investors had hoped, mainly due to unexpectedly strong inflation and possible policy changes that could influence it. Economists at Morgan Stanley have revised their projections, now predicting fewer rate cuts in 2025 but still anticipating more in 2026 compared to the Fed's outlook. They foresee lower treasury yields and a weaker dollar by the end of 2025. Concerns linger about ongoing inflation, especially in the housing sector and the effects of potential policy adjustments.
