Morgan Stanley: Fed Rate Hikes Lower Than Market Expectations

Morgan Stanley's interest rate strategists stated in a report that after the Fed's rate hike in September, it is expected to raise rates again in December and March next year. However, market pricing indicates a more aggressive rate hike over the next year. The strategists pointed out that uncertainties regarding the Fed, economic growth, corporate bond issuance, and oil prices have raised expectations for further tightening of monetary policy in the next 12 months. However, Morgan Stanley believes that the actual tightening by the Fed will not reach the levels anticipated by the market, as key factors influencing the Fed's policy path will become clearer later this year. According to data from the London Stock Exchange Group, the money market expects the Fed to raise rates by a cumulative 100 basis points over the next 12 months.

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