#Morgan Stanley: March rate cut likely#

Morgan Stanley believes that while the recent US nonfarm payrolls report may reduce the likelihood of a Fed rate cut in the near term, the possibility of a rate cut in March remains high due to a more favorable inflation outlook. Morgan Stanley's optimism on the inflation outlook stems from its expectation of continued declines in inflation data, which would provide the Fed with more room to cut rates. While recent employment data has been strong, Morgan Stanley believes it does not fully offset the downward pressure on rates from declining inflation, hence the possibility of a rate cut in March still exists.