Morgan Stanley has now given up on its contrarian stance the Federal Reserve will cut interest rates in March.

Morgan Stanley joined Barclays and Macquarie in forecasting a single 25 basis point interest rate cut by the U.S. Federal Reserve this year, citing uncertainty from President Donald Trump's tariff policy.

With no clear indication of U.S. tariff decisions, Morgan Stanley now expects only one rate cut worth 25 basis points in 2025 compared to its previous view of two rate reductions through the year. A Morgan Stanley research note said imposing tariffs more quickly than assumed would likely mean disinflation halts at a higher pace of inflation,