Global Cross-Asset Strategy: Morgan Stanley Research: Key Forecasts

Research evidence excerpt

Global Cross-Asset Strategy: Morgan Stanley Research: Key Forecasts

Global Idea

June 22, 2026 09:20 PM GMTM

Morgan Stanley Research: Key Forecasts

Next 12-Months Outlook: Our High-Conviction Calls Next 12-Months Snapshot

The economic outlook remains constructive. In the context of the MS mid-year outlook, the US economy is evolving in line

US data continue to benefit from a stable consumer and robust equipment

with our benign de-escalation baseline following the recent decline in oil prices. Incoming data suggest that our stronger

investment, reinforcing our view that real growth remains steady and

AI-driven demand scenario remains plausible. Markets, however, are still debating what the 2Q rise in oil prices means for

consumption dynamics are closely tied to inflation. We expect consumption to

inflation. MS forecasts expect the pass through from headline to core inflation to remain modest if indeed oil prices remain be soft as energy weighs on disposable income but as that passes and tariff

below $100/barrel. This summer should also mark a visible y/y disinflation trend as we move one year post tariffs. The inflation passes, we see consumption improving. At a global level, we have

downward effect of tariffs should more than offset any residual oil price risks. The tension in these forces remains central written about the risks to growth and second order effects may transmit across

to central bank decisions this summer, as the ECB has already hiked and the Fed debate remains strong. Away from oil, AI-led PMIs. Euro area PMIs continued to soften as services PMIs missed materially

growth in the US continues to push forward as investment and trade remain firm. recently. In Asia, 2Q growth momentum is holding up better than we expected.