Morgan Stanley

Morgan Stanley’s chief economist, Seth Carpenter, cautioned that the full impact of the Federal Reserve’s aggressive rate-hike cycle is still to be felt, predicting an inevitable hard-landing recession. Despite recent signs of cooling inflation, Carpenter emphasized that the Fed’s efforts to tame price pressures will have a severe impact on economic growth. He anticipates a housing-market correction, rising unemployment, and a significant slowdown in corporate earnings. Carpenter’s dour outlook suggests that the economy is bracing for a severe downturn as the consequences of the Fed’s monetary tightening play out.