Halister News

(Bloomberg) -- Recent data, contrary to Fed Chair Janet Yellen’s assessment, suggests 4Q could be “quite sluggish,” following 3Q growth that “fizzled,” Morgan Stanley economists Ellen Zentner, Robert Rosener, Michel Dilmanian write in note.

• Morgan Stanley disagrees with Yellen’s view that case for next rate hike has strengthened
• Fed should “practice even more patience”
  • No evidence economy is overheating, slack remains, there’s little sign of “fundamental” inflation pressures
  • “Never been a stronger argument” that could be made for Fed to be “back-footed on policy” than now
• No recession appears to be coming in near term, yet there’s “elevated risk” of one in next 12 months