Morgan Stanley Fixed-US Economics Global Macro Strategy FOMC Reaction Firm Ho...-107962595

MMay2,202401:01AMGMTMorganStanley&Co.LLCIdeaUSEconomics&GlobalMacroStrategyNorthEllenZentner+1212296-4882America+1212761-1445ChiefUSEconomist+1212761-4630FOMCReaction:FirmHoldwithEllen.Zentner@morganstanley.com+1212761-8573anEasingBias+1212761-0857GuneetDhingra,CFA+1212761-1837Committeeisnotfocusedonahikescenario;nextmovelikelya+1212761-5287cut;focusremainsonlengthofhold.Powell'sconfidenceinStrategist+1212761-2647inflationissomewhatless,buthestillexpectsinflationtomoveGuneet.Dhingra@morganstanley.com+1212761-6076lowerbyyear-end.OuragencyMBSstrategistsmoveoverweight.Ourratesteammaintains3m30yreceivers.SamDCoffin+8136836-5466KeyTakeawaysEconomist+1212761-6051Sam.Coffin@morganstanley.com+1212761-2779•Ratesdecision:TheFOMCheldthepolicyrateunchangedinarangeof5.25-5.50%,whereithasremainedsinceJuly2023.DespitealackDiegoAnzoateguioffurtherprogressin1Q24,disinflationhascomealongwayoverthepastyear,andtheCommitteeremainsfocusedonthelengthofholdEconomisttime.QTtaperannouncedtobegininJune,asexpected.Diego.Anzoategui@morganstanley.com•Outlook:Wecontinuetoseethreecutsthisyear,startinginJuly,SarahAWolfethoughinflationsurprisesin1Qhavenarrowedthepathtogetthere.TheCommitteesawupsideriskstoinflationinMarch,andthesehaveEconomistlikelygrown:ittakesjusttwopolicymakerstolowerthemedianinSarah.Wolfe@morganstanley.comJunetotwocutsin...