Morgan Stanley has postponed its forecast for the Federal Reserve's first interest rate cut to September

Morgan Stanley's economists, citing a lack of progress in inflation, have postponed the expected timing of the Federal Reserve's first rate cut from July to September. They still expect three rate cuts this year, each by 25 basis points. Economists Ellen Zentner, Sam Coffin and Diego Anzoategui stated in their report that the lack of progress since the beginning of this year means that Fed policymakers need more time to be confident that inflation is steadily falling towards a 2% target. They predict that by the end of the year, core PCE at an annualized rate for three and six months will be "close to or below" 2%. In such a case, waiting until after September to cut rates would be "too late".