Morgan Stanley expects only slow rate cuts from the Fed – want to be sure inflation lower

<p>A senior portfolio manager for U.S. equities at Morgan Stanley Investment Management was interviewed by Dow Jones.</p><p>On the Federal Open Market Committee (FOMC), expects only slow rate cuts this year, to be "patient".</p><ul><li>economy appears strong</li><li>the Fed has "time to be patient and make sure the true secular trend in inflation is lower"</li><li> "inflation is running at a substantially lower rate" than the Fed Funds rate</li><li>messaging from the Fed that cuts need to come sooner would make him a little nervous because it could mean the economy may be slowing faster than he expected</li></ul><p>On the outlook for US equities in 2024:</p><ul><li>expects it will be more challenging for U.S. stocks to keep rising in 2024 after the S&amp;P 500's jump in 2023</li><li>but "the market will be higher this year because I think earnings will come through."</li><li>expecting to see a broadening out of gains across shares, more companies participating in the stock market's rise.</li><li>

"I am of the camp that the economy will remain strong,"</li><li>"I don't hear signs of slowdown."
</li><li>stock market may be more volatile than last year</li><li>"having some powder dry for an opportunity to step in" and buying during a pullback may be "the right thing to do."</li></ul>

This article was written by Eamonn Sheridan at

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