- Morgan Stanley forecasts rate cuts in 2026.
- Potential growth in risk assets and crypto markets.
- Historical context shows positive crypto trends with rate cuts.
Morgan Stanley projects the Federal Reserve will initiate interest rate cuts by 25 basis points at four meetings in 2026, achieving a target range of 2.75%-3.0%.
This potential policy shift suggests increased economic liquidity, positively influencing equities and cryptocurrencies with anticipated gains in Bitcoin and Ethereum due to enhanced market conditions.
The Prediction and Its Market Influence
The prediction from Morgan Stanley could influence financial markets significantly, with expected growth in risk asset flows and economic growth. Lower rates typically reduce borrowing costs, leading to reallocations of capital towards growth sectors.
Morgan Stanley’s forecast, delivered by the institution’s Chief Economist, Seth Carpenter, envisions the Federal Reserve making a substantial rate cut across four meetings in 2026, resulting in a 2.75%-3.0% range. Encrypted communications from Morgan Stanley express an expectation for a more pronounced rate-cutting cycle than the market currently predicts.
Market reactions have yet to surface from crypto key opinion leaders. However, GitHub and protocol roadmaps may shift to align with anticipated macroeconomic shifts. Andrew Sheets from Morgan Stanley expressed concerns regarding market expectations of rate cuts, stating:
Monitoring crypto forums may yield trader sentiments as liquidity dynamics evolve.
Historical Context, Price Data, and Expert Analysis
Did you know? Past rate cuts from 2019-2020 drove significant rallies in major crypto assets as traditional yields declined, showcasing how monetary policy shifts can fuel crypto growth.
As of August 26, 2025, Bitcoin’s price is $110,205.36, with a market cap of $2.19 trillion and a market dominance of 57.76%. Its trading volume reflected an increase of 21.94% over the past 24 hours, against a 24-hour price decline of 1.91%, according to CoinMarketCap.
Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 06:04 UTC on August 26, 2025. Source: CoinMarketCapCoincu researchers suggest that the anticipated rate reduction will likely stir increased stablecoin supply and rising decentralized finance TVL. Historically, lower rates have bolstered BTC, ETH, and their respective ecosystems through increased global liquidity.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
Source: https://coincu.com/markets/morgan-stanley-predicts-fed-rate-cuts/
