Skip to main content

Market Overview

July Fed Meeting Forecasts From Morgan Stanley

July Fed Meeting Forecasts From Morgan Stanley

“We expect the FOMC will acknowledge increased uncertainty around the outlook and ambiguously point to an expectation that the Committee will maintain an appropriate level of policy accommodation,” stated Morgan Stanley analyst Ellen Zentner ahead of the July Federal Reserve meeting.

Forecasts For The Fed

  • A hold on the target range of federal funds rate, remaining steady at 0.25 to 0.5 percent.
  • A statement to describe a “backdrop of moderate growth, further job gains, solid consumer spending and ongoing housing recovery, alongside weak business investment” and low inflation compensation.
  • Acknowledgment of increased uncertainty.
  • “Appropriate policy accommodation” rather than “gradual adjustments.”
  • A revised statement providing greater ambiguity.

Zentner noted the meeting is “minor” and contains no supporting materials or Q&A. The low-key atmosphere played a part in the analyst’s forecasts, especially with holding the federal fund rates steady.

Related Link: To Raise Or Not To Raise Rates: A Tale Of 2 Fed Reserve Presidents

Market Reaction Forecasts

If the above predictions are correct, the Morgan Stanley analyst believes there will be a probability of 50 percent for a rate December rate hike.

“Given we expect a muted reaction, we suggest investors remain neutral on duration and curve shape in the US rates market going into the meeting.” said the analyst.

At time of writing, the SPDR S&P 500 ETF Trust (NYSE: SPY) was trading relatively flat on the day at $216.35, off $0.78 from the market open of $216.92.

Did you like this article? Could it have been improved? Please email with the story link to let us know!


Related Articles (SPY + SPXS)

View Comments and Join the Discussion!

Posted-In: Analyst Color News Broad U.S. Equity ETFs Events Economics Federal Reserve Signals Analyst Ratings Best of Benzinga

Latest Ratings

XECMorgan StanleyMaintains78.0
VYGRMorgan StanleyMaintains6.0
VRTXMorgan StanleyMaintains253.0
TAPMorgan StanleyMaintains49.0
SWNMorgan StanleyMaintains5.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at