Morgan Stanley Chief Investment Officer: Eased Tariff Pressure Opens Space for Federal Reserve Rate Cuts, Significantly Reducing Recession Risk

According to TechFlow, on May 13th, reported by JIN10 Data, Morgan Stanley's Chief Investment Officer Mike Wilson believes that the historic sell-off triggered by Trump has come to an end. He reiterated his forecast that the S&P 500 index will reach 6,500 points by the end of the year (a 12% increase from the current level), and pointed out that the easing tariff pressures open up room for the Federal Reserve to cut interest rates, which will directly benefit stocks and other risk assets.

Wilson stated, "If the tariff threat diminishes, the Federal Reserve can rebalance its dual mandate. Although the growth outlook is somewhat optimistic, the policy balance may lean more toward stimulating the economy rather than curbing inflation." He particularly emphasized that with the weakening dollar and progress in China-US negotiations, the risk of economic recession has "significantly decreased," and corporate earnings expectations have improved accordingly: "From a rating adjustment perspective, performance in the second half of the year is very likely to exceed expectations, after all, the first half was really terrible."