The market expects the Federal Reserve to cut rates in December, while Morgan Stanley maintains that rate cuts will occur in June and September.

PANews reported on March 17 that Morgan Stanley maintains its forecast that the Federal Reserve will resume rate cuts in June and cut rates again in September, despite soaring oil prices prompting traders to reduce their bets on the magnitude of rate cuts this year. "We still predict action in June and September, although there is certainly a risk of delays," Morgan Stanley's chief U.S. economist, Michael Gapen, said on Monday in New York during a Bloomberg News roundtable discussion.

This forecast contradicts the market's rush to rule out a rate cut, as the surge in oil prices following the Iran war could reignite inflation and potentially hinder the Federal Reserve's ability to ease monetary policy. Futures linked to the Fed's policy rate now anticipate a 25-basis-point cut in December, compared to a forecast of at least 50 basis points this year just last month. The market now expects a 60% probability of a 25-basis-point cut in September. Economists at TD Securities and Barclays both postponed their forecasts for the next Fed rate cut from June to September last week.