MS · News · 20260915N
Interest Rate Outlook
MORGAN STANLEY · 2026-09-15 · Importance 22 · Surprise 32 · In source text
Morgan Stanley now expects the U.S. Federal Reserve to deliver two additional 25-basis-point rate hikes in 2026, in September and December. The firm cited slower-than-expected disinflation and persistent inflationary pressure. It also forecasts a 25-basis-point European Central Bank hike in December, reversing its earlier view that the tightening cycle had ended. The revised outlook indicates higher-for-longer rates across the U.S. and euro area, with potential implications for client activity, financing demand, and asset valuations.
Key facts
- The firm now expects the U.S. Federal Reserve to implement two more 25-basis-point rate hikes this year, one in September and another in December. source
- Morgan Stanley anticipates a further 25-basis-point increase from the European Central Bank in December. source
- Morgan Stanley has joined Goldman Sachs in a last-minute change of forecast, now predicting that the Federal Reserve will hike interest rates. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| revenue | unclear | contingent | — | The firm now expects the U.S. Federal Reserve to implement two more 25-basis-point rate hikes this year, one in September and another in… |
| revenue | unclear | contingent | — | Morgan Stanley anticipates a further 25-basis-point increase from the European Central Bank in December. |