Central Banks
No Fed Cuts or Five Fed Cuts? Wall Street Is Stumped by Tariffs
This article is for subscribers only.
It was shortly after 2 a.m. in Zurich when Mark Haefele, the chief investment officer at UBS Global Wealth Management, gave his verdict on President Donald Trump’s new barrage of tariffs. The Federal Reserve, Haefele wrote to his clients, will now have to cut interest rates far more aggressively this year — as many as four times.
About 12 hours later, Michael Gapen, Morgan Stanley’s chief US economist, came to the exact opposite conclusion: The Fed couldn’t cut rates at all now. He and his team scrapped their call for a reduction in June and predicted the Fed would be forced to wait till next year to cut again.