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Morgan Stanley Predicts Fed and ECB Rate Cuts in September
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Morgan Stanley's Andrew Sheets predicts that both the U.S. Federal Reserve and the European Central Bank will cut rates in September. Recent data indicates a slowdown in inflation in both regions. The ECB has already reduced rates, whereas the Fed has postponed such action, citing persistent high inflation in the U.S. Sheets anticipates that inflation will continue to decline, supporting the case for rate cuts.
Inflation in the Eurozone increased marginally to 2.6% in May, influenced by shifts in the energy market and reduced government support. Meanwhile, U.S. inflation remained constant at 3.3% year-on-year. The Fed closely monitors the core PCE price index, which is its preferred measure of inflation.
Economists predict that the Fed will reduce rates from 5.25% to 5.50% in September, with the possibility of additional cuts later in the year. The ECB is also expected to cut rates in both September and December.
| Scores | Value | Explanation |
|---|---|---|
| Objectivity | 6 | Comprehensive reporting with in-depth analysis. |
| Social Impact | 4 | Influences some public opinion on economic policies. |
| Credibility | 5 | Solid evidence from authoritative sources. |
| Potential | 5 | Almost certain to trigger economic adjustments. |
| Practicality | 4 | Directly applicable to economic forecasting. |
| Entertainment Value | 2 | Includes a few entertaining elements. |