13 November 2023
The Federal Reserve’s focus on fighting inflation overlooks Morgan Stanley’s forecast of a significant cut in the Fed Funds rate from 5.50% to 2.375% by 2024. This 215 basis point reduction hints at a potential drop in the 30-year mortgage rate to about 5.50%. While beneficial for homebuyers, this projection aligns with a troubling economic slowdown, including a rise in unemployment to 4.3%, indicating overlooked risks in the Fed’s current approach.