Morgan Stanley joins Goldman Sachs in 11th-hour switch to forecasting a Fed hike

Morgan Stanley late Monday revised its forecast for the Federal Open Market Committee's decision, shifting from expecting rates to remain unchanged to anticipating a rate hike. The move follows a similar 11th-hour change from Goldman Sachs, marking a notable convergence among two major Wall Street houses just ahead of the meeting.

Such late revisions matter because rate expectations feed directly into bond yields, the dollar, and equity valuations. When prominent banks flip their calls close to a decision, it can signal that incoming data or Fed communications have shifted the perceived balance of risks. Markets may reprice accordingly, with short-term volatility often rising around the announcement as positioning adjusts.

For observers, the key question is whether other forecasters follow suit or whether this remains a minority view. The FOMC's statement, updated projections, and the chair's press conference will ultimately clarify the policy path. Until then, these revised calls serve as a reminder that near-term rate expectations can move quickly and should be weighed alongside the full range of analyst views.