USDJPY Daily
Morgan Stanley expects a series of 25 basis point rate cuts by the Fed through mid-2025, and recommends maintaining short positions in USD/JPY, targeting a move towards 138.
Key points:
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Federal Open Market Committee Interest Rate Decision:
- The Federal Open Market Committee cut the federal funds rate by 50 basis points to 4.875%reflecting continued progress in inflation and concerns about the labor market.
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Economic Forecast Update:
- The Summary of Economic Outlook (SEP) now indicates that four pieces This year, we saw a significant shift from previously expected, which is in line with declining inflation rates and labor market data.
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Federal Reserve Commitment:
- The larger initial cut signals the Fed’s commitment to staying ahead of inflationary pressures, and Chairman Powell stressed that future cuts will depend on incoming data.
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Future Discounts Expectations:
- Morgan Stanley expects two more issues 25 basis points This year’s sales and four more in the first half of 2015. 2025.
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Forex Strategy:
- The firm’s foreign exchange strategists recommend shorting the USD/JPY pair as the Fed continues its easing cycle.
conclusion:
Morgan Stanley’s forecast supports a short-selling strategy for USD/JPY in anticipation of continued Fed cuts, putting the dollar in a position of potential weakness as the easing cycle develops.
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