US Economics, US Rates, US Equities, US CRE/REITs: What We Like If the Fed Stays on Hold This Year

Research evidence excerpt

US Economics, US Rates, US Equities, US CRE/REITs: What We Like If the Fed Stays on Hold This Year

Idea

July 1, 2026 04:31 PM GMT

Morgan Stanley & Co. LLCMUS Economics, US Rates, US Equities, US CRE/REITs Michael T Gapen

| North America Chief US Economist

Michael.Gapen@morganstanley.com +1 212 761-0571

Matthew Hornbach

StrategistWhat We Like If the Fed Stays Matthew.Hornbach@morganstanley.com +1 212 761-1837

Ronald Kamdem, CFA

Equity Analyston Hold This Year Ronald.Kamdem@morganstanley.com +1 212 296-8319

Andrew B Pauker

Markets have priced in hikes this year, but we see a lower Equity Strategist

Andrew.Pauker@morganstanley.com +1 212 761-1330

inflation path that keeps the Fed on hold, reflecting fading tariff Martin W Tobias, CFA

effects, easing energy pressures, and shelter disinflation. We StrategistMartin.Tobias@morganstanley.com +1 212 761-6076

assess the implications for US rates, equities, and CRE/REITs. Jenny Li

Research Associate

Jenny.Li1@morganstanley.com +1 212 761-2228

Key Takeaways Diego Anzoategui

Economist

We believe FOMC projections may be overstating inflation pressures. A fading Diego.Anzoategui@morganstanley.com +1 212 761-8573

tariff push, oil in decline, and shelter deceleration suggest disinflation ahead. Cameron McVeigh, CFA

Equity Analyst

Investors overweight hawkish Fed risks but discount existing tightening via Cameron.McVeigh@morganstanley.com +1 212 761-4209

financial conditions. As inflation cools, we anticipate a lower implied rate path. Sam D Coffin

Strong earnings growth underpins our bullish view on US equities, with a less Sam.Coffin@morganstanley.com +1 212 761-4630

Arunima Sinha

hawkish Fed providing an additional tailwind.

Global Economist