- Morgan Stanley expects U.S. jobless productivity growth affecting inflation and Fed policy.
- Federal Reserve is projected to have a single rate cut by 2026.
- AI adoption and consumer strength influence productivity and labor market impacts.
Morgan Stanley economists project a ‘jobless productivity boom’ in the U.S. economy, boosting productivity and potentially leading to Federal Reserve rate cuts amid ongoing AI adoption.
This scenario suggests potential for increased investment appeal in cryptocurrencies like Bitcoin and Ethereum, which tend to benefit from rate cuts and AI-driven productivity gains.
Morgan Stanley’s ‘Jobless Boom’: Economic Shifting Gears
Morgan Stanley strategists anticipate a “jobless productivity boom” in the U.S. economy, signaling possible changes in inflation rates and an opening for policy adjustments by the Federal Reserve. Key figures like Seth Carpenter and Michael Gapen note the reliance on consumer strength and AI’s role in productivity.
The scenario suggests investor expectations for U.S. rate cuts could diverge from the Federal Reserve’s forecasts. According to the CME FedWatch tool, investors see a 72% chance of a Fed rate cut by the end of 2026, compared to the Federal Reserve’s projection of just one rate adjustment.
“The exact path depends on the strength of the consumer amid a slowing labor market and when AI adoption increases productivity gains meaningfully.” — Seth Carpenter, Chief Global Economist, Morgan Stanley
Notable reactions in the market include potential impacts on risk assets like Ethereum (ETH) and Bitcoin (BTC), which historically benefit from lower rates. Influential insights were provided by Morgan Stanley, linking AI-driven productivity to lower inflation and suggesting possible shifts in asset allocations.
Cryptocurrency Dynamics: Rate Cuts and Market Movements
Did you know? Investor expectations for multiple Federal Reserve rate cuts could historically precede significant market rallies, similar to post-crisis periods like 2008 and 2020.
Ethereum (ETH) is trading at $2,934.68, showing a 4.11% rise over seven days but a 30.20% decrease over 60 days. Its 24-hour trading volume is $12.49 billion, marking a 7.20% decline. Current figures suggest fluctuating yet resilient intraday activity, according to CoinMarketCap.
Coincu research suggests potential improvements in Specific DeFi protocols from Ethereum’s market position, aligned with historical gains during low-rate periods. Meanwhile, AI’s emerging influence suggests a broader technological impact across economic sectors.
| 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. |
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