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Goldman Sachs, Morgan Stanley Clash Over Future Interest Rates

Goldman Sachs and Morgan Stanley are at odds when it comes to the potential interest rate hike this month, and the recent payrolls report isn’t helping.

Analysts at Goldman say the 151,000 jobs added in August is enough to boost chances by 55% that the Fed will take action at its Sept. 20-21 meeting. But Morgan Stanley experts maintain the slack in the US labor market and low inflation will push the Fed to keep rates steady, Bloomberg reports.

“Our Fed call has remained resilient in the face of inevitable hawkish chatter that, just like hope, springs eternal,” wrote Morgan Stanley strategist Matthew Hornbach in a recent note to clients. “Our US economists still expect the Fed to remain on hold through 2017.” [Bloomberg]