Morgan Stanley has highlighted a significant increase in US labor productivity, which may prompt the Federal Reserve to consider further interest rate cuts. In the second quarter, labor productivity rose by 3.3% year-on-year, a notable recovery from a 1.8% decline in the first quarter. While the Fed currently anticipates one rate cut in 2026, market sentiment suggests a 72% probability of rate reductions by the end of the year.
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Morgan Stanley Predicts Fed Rate Cuts Amid US Productivity Surge
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