Morgan Stanley, Goldman Sachs, and UBS Diverge on Fed Rate-Cut Forecasts Amid U.S. Recession

Traders and economists have divergent views on the Federal Reserve's interest-rate cuts. Morgan Stanley forecasts deep cuts over the next two years, starting in June 2024, while Goldman Sachs expects fewer reductions and a later start. UBS anticipates a raft of rate cuts next year due to a U.S. recession. The market's expectations for the path of the Fed Funds Rate indicate a potential 25 basis point cut to 5.00-5.25% in May 2024, with additional cuts to 3.80% by November 2025.