Opinion: The easing of tariff pressure has opened up room for the Federal Reserve to cut interest rates, and the risk of recession has been "significantly reduced"

Morgan Stanley's chief investment officer Mike Wilson believes the historic Trump-induced sell-off is over. He reiterated his forecast that the S & P 500 will end the year at 6,500 (up 12% from current levels), and pointed out that the easing of tariff pressure opens up room for the Federal Reserve to cut interest rates, which will directly benefit risk assets such as stocks. "If the tariff threat weakens, the Fed can rebalance its dual mandate," Wilson said. "While the growth outlook is slightly optimistic, the policy balance may be more skewed towards stimulating the economy than suppressing inflation." He particularly emphasized that with the weakening of the US dollar and the progress of Sino-US negotiations, the risk of economic recession has been "significantly reduced", and corporate profit expectations have improved accordingly: "From the perspective of rating adjustment, the performance in the second half of the year is likely to exceed expectations, after all, the first half is really bad." (Jin Ten)