Morgan Stanley sees US Fed cut delay pushing back easing in Asia
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Most central banks across Asia are likely to begin cutting interest rates later in the year — if at all, according to economists at Morgan Stanley. Central bank policymakers in China, South Korea, Indonesia, the Philippines, and Taiwan are set to postpone rate cuts, while India and Malaysia hold rates for the rest of the year. The delay in the Federal Reserve's policy easing has influenced the outlook for Asian central banks. The odds of rate cuts globally are waning as data points to ongoing inflation pressures in the US. Asian central banks are unlikely to lower rates ahead of the Fed to protect their currencies. Overall aggregate real rates will likely stay about 30 basis points above pre-Covid levels through at least the first quarter of 2025. Risks to the forecast include surging oil prices and further inflationary pressure.



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