MS · News · 20260921N

Interest Rate Outlook

MORGAN STANLEY · 2026-09-21 · Importance 17 · Surprise 24

A Federal Reserve decision five days earlier raised interest rates by 25 basis points. Stephen Biggar characterized Chair Kevin Warsh’s hawkish tone as signaling a potentially steeper hiking cycle. The higher-rate outlook is presented as a macro test for bank stocks, including Morgan Stanley, although the report remains bullish on large banks.

Key facts

• Morgan Stanley strategist Michael Wilson warned that US equities, specifically the S&P 500, could drop as much as 7% in the near term due to increased energy prices and bond market volatility. source