Morgan Stanley Changes Its Previous Forecast After Powell’s Statements, Provides a Date! When and How Many Rate Cuts Will the Fed Make?

Just like the altcoin rally, the question of when the FED will cut interest rates has become a never-ending story.

As is known, the FED has paused interest rate cuts and has been keeping interest rates constant since January.

While there are different predictions that the FED will begin cutting interest rates, Morgan Stanley revised its forecasts and announced its latest updated forecast.

Accordingly, Morgan Stanley expects the Fed to make two interest rate cuts in September and December 2025.

Morgan Stanley has joined global investment banks in predicting the Fed will cut interest rates in September, according to a Reuters report.

The reason for this change was pointed to FED Chairman Jerome Powell’s change of tone at the Jackson Hole summit.

Bank analysts said Powell’s change of tone was a sign that the Fed would ease monetary policy sooner.

Accordingly, Morgan Stanley, which previously stated that interest rates would remain unchanged until March 2026, announced that it expects two interest rate cuts in 2025. The bank also added that interest rates will be reduced to the 2.75%-3% range with further rate cuts throughout 2026.

“The first interest rate cut of 25 basis points in September 2025,

Second interest rate cut in December 2025,

It is estimated that multiple 25 basis point interest rate cuts will be made throughout 2026 and interest rates will fall to the 2.75-3 percent range.

Following FED Chairman Powell’s statements on Jackson Hole, Barclays, BNP Paribas and Deutsche Bank announced that they expect a 25 basis point interest rate cut for September, while the probability of an interest rate cut in the markets is priced in at 84 percent.

*This is not investment advice.