Morgan Stanley: Latest PCE Report Fails to Lower Fed Rate Hike Expectations

The message here is that even a widely watched inflation gauge, the core PCE, is not shifting the Fed's hawkish stance, which keeps rate-hike risk alive for all risk assets. The significance is that sticky inflation, as flagged by Morgan Stanley, directly challenges market pricing for any near-term easing, meaning liquidity conditions could stay tighter for longer. This matters for crypto and RWA valuations, which have been sensitive to dollar and rate expectations. What to watch next is whether upcoming data releases break this pattern or reinforce the firm's view that policy tightening remains on the table.