Market Overview

Morgan Stanley CEO: Raising Rates Would Be Recognition That U.S. Is Back On Track


Morgan Stanley (NYSE: MS) posted disappointing Q4 numbers Tuesday on the back of falling underwriting revenues. However, CEO James Gorman feels that the U.S. economy is doing great and will continue to do so.

Gorman was interviewed by CNBC at the World Economic Forum in Davos on Thursday.

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“[The] U.S. is doing terrifically. [The] problem is, we have so much [scar tissue] from the crisis we just don’t like admitting it.”

Parsing Out The U.S. Situation

He continued, “So, if you look at unemployment under 6 percent, [if] you look at the strength in the dollar, [if] you look at the return of the housing market, [if] you look at appreciation of 401k plans – the list goes on and on and on. But one problem is where the minimum wages are and that’s even starting to be addressed. So, I am very confident about the U.S. outlook going 3 to 4 percent [in the] next several years.”

Raising Rates

When asked whether he would raise rates in June if given a chance, Gorman said, “I would definitely raise in June.”

He also feels that the Fed would most probably go ahead and raise rates in June.

He explained raising rates as “a sign of strength.” A sign that indicates confidence and recognizes that the U.S. is on its way back.

Gorman doesn’t believe that low interest rates should continue any longer, “because you run the potential on the other side of an asset bubble.”


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Posted-In: CNBC James Gorman World Economic ForumMedia