After a wild ride on Wall Street this year, Morgan Stanley is bracing for a midyear recession.
Despite a strong rally in stocks following a brief tariff pause, economic data tells a more troubling story: inflation is sticky, job growth is slowing, and consumer confidence is falling fast.
Morgan Stanley now expects no more Fed rate cuts until 2026, a sharp reversal from earlier hopes.
With tariffs fueling inflation and weighing on growth, the Fed finds itself in a bind—cut rates and risk inflation or hold and risk a recession.