Morgan Stanley delays expectations for the Federal Reserve's first rate cut until September

Economists at Morgan Stanley, citing a "lack of progress" on inflation, pushed back expectations for the Fed's first rate cut from July to September. They still expect three 25-basis point cuts this year. Economists such as Ellen Zentner, Sam Coffin and Diego Anzoategui said in a report that the lack of progress since the start of the year meant it would take longer for Fed policymakers to be confident that inflation was falling steadily towards its 2 per cent target. They expected the core three- and six-month annualised PCE to be "near or below" 2 per cent by the end of the year, in which case it would be "too late" to wait until after September to cut rates.