MORGAN STANLEY has shifted to a more hawkish outlook and now forecasts two 25bps Federal Reserve hikes — at the Sept. 15-16 meeting and in December — citing persistent inf and recent data that surprised to the upside. The bank also expects the ECB to tighten again; its call comes as the Fed and the Bank of Japan make policy decisions this week and after the ECB resumed tightening days earlier. In a Monday note it said the disinflation process looks slower and less convincing than policymakers ma

MORGAN STANLEY has shifted to a more hawkish outlook and now forecasts two 25bps Federal Reserve hikes — at the Sept. 15-16 meeting and in December — citing persistent inf and recent data that surprised to the upside. The bank also expects the ECB to tighten again; its call comes as the Fed and the Bank of Japan make policy decisions this week and after the ECB resumed tightening days earlier. In a Monday note it said the disinflation process looks slower and less convincing than policymakers may require, and that signs of energy second-round effects, strong AI-linked investment demand, a possibly temporarily higher neutral rate and credibility concerns tilt the risk balance modestly toward tighter policy, though both hikes and pauses remain plausible.