Morgan Stanley: The Federal Reserve's interest rate hike may be lower than expected

Morgan Stanley interest rate strategists stated that after the Federal Reserve raises interest rates in September, it is expected to raise rates once in December and once in March next year. However, market pricing indicates a more aggressive rate hike over the next year.

The strategists believe that the actual tightening by the Federal Reserve will not reach the level expected by the market, as key factors will only become clear later this year. The money market anticipates a cumulative rate hike of 100 basis points over the next 12 months.