Morgan Stanley: Despite Powell's Hawkish Signal, the Fed Will Keep Rates Unchanged

BlockBeats News, September 4th, Morgan Stanley expects that despite Fed Chair Powell sending a hawkish signal at the Jackson Hole Symposium, the Fed will keep interest rates unchanged. The current inflation data may provide a basis for the Fed to maintain patience.

The bank expects the US core CPI to rise by 0.23% month-over-month in August, and core PCE to rise by 0.20%. Additionally, revisions to the PCE data may lower the annual growth rate of core PCE from 3.3% to around 3.1%, further supporting a delay in rate adjustments.

Powell's hawkish rhetoric is more likely aimed at preserving policy flexibility rather than signaling the start of a new rate hike cycle.