Morgan Stanley: U.S. "jobless productivity boom" will prompt further Fed rate cuts

According to Odaily, Morgan Stanley strategists have pointed out that the U.S. economy may experience a "jobless productivity boom," which could curb inflation and open the door for more rate cuts by the Federal Reserve. Data from the U.S. Department of Labor shows that the hourly output of all nonfarm business workers increased by 3.3% year-on-year in the second quarter, a significant improvement compared to the 1.8% year-on-year decline in the previous quarter. Investors' expectations for the pace of Fed rate cuts next year are more aggressive than official forecasts. According to the CME FedWatch tool, Fed officials expect only one rate cut in 2026, but investors believe there is a 72% probability that rates will fall by the end of the year. (Golden Ten Data)