Morgan Stanley Joins Peers in Pushing Back Fed Cut Forecasts on Inflation Fears

FILE PHOTO: Morgan Stanley logo appears in this illustration taken December 1, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Morgan Stanley logo appears in this illustration taken December 1, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
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Morgan Stanley Joins Peers in Pushing Back Fed Cut Forecasts on Inflation Fears

FILE PHOTO: Morgan Stanley logo appears in this illustration taken December 1, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Morgan Stanley logo appears in this illustration taken December 1, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

Morgan Stanley on Thursday joined Goldman Sachs and Barclays in pushing back its forecast for the US ​Federal Reserve's next interest rate cut to September from June after the central bank flagged inflationary risks amid the Middle East conflict.

The Wall Street brokerage now expects quarter-point reductions in September and December, revising its earlier forecast of reductions in June and September.

"In the near term, ‌higher energy prices ‌will push up overall inflation, ​but ‌it ⁠is ​too soon ⁠to know the scope and duration of the potential effects on the economy," Fed Chair Jerome Powell said in a press conference after the central bank kept interest rates unchanged on Wednesday.

New projections show that Fed policymakers as a ⁠group anticipate the Federal Open Market Committee ‌will cut the policy rate ‌by a quarter percentage point ​before the end ‌of the year, while major Wall Street firms ‌still expect two rate cuts.

"A cautious Fed means delay. The primary risk to our view remains that rate cuts come later or not at all," Morgan ‌Stanley strategists said in a note.
"In the other direction, a second-round surge ⁠in oil ⁠prices could mean activity and labor markets weaken, prompting cuts."

Oil prices have climbed above $100 a barrel due to the ongoing Middle East conflict that has led to the closure of the Strait of Hormuz, a key trade route that handles almost a fifth of the global oil trade.

Traders are currently pricing in over a 70% chance that the US central bank will ​hold rates steady ​in September, according to the CME FedWatch tool.



Riyadh Backs Seoul with 250 Million Barrels of Crude Oil

The screens showing the Korea Composite Stock Price Index (KOSPI), the foreign exchange rate between US dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ) at a dealing room of Hana Bank, in Seoul, South Korea, Thursday, April 16, 2026. (AP Photo/Lee Jin-man)
The screens showing the Korea Composite Stock Price Index (KOSPI), the foreign exchange rate between US dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ) at a dealing room of Hana Bank, in Seoul, South Korea, Thursday, April 16, 2026. (AP Photo/Lee Jin-man)
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Riyadh Backs Seoul with 250 Million Barrels of Crude Oil

The screens showing the Korea Composite Stock Price Index (KOSPI), the foreign exchange rate between US dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ) at a dealing room of Hana Bank, in Seoul, South Korea, Thursday, April 16, 2026. (AP Photo/Lee Jin-man)
The screens showing the Korea Composite Stock Price Index (KOSPI), the foreign exchange rate between US dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ) at a dealing room of Hana Bank, in Seoul, South Korea, Thursday, April 16, 2026. (AP Photo/Lee Jin-man)

South Korea has secured 273 million barrels of crude oil from the Middle East and Kazakhstan through the end of the year, with supplies routed outside the Strait of Hormuz, presidential chief of staff Kang Hoon-sik said on Wednesday.

Asia's fourth-largest economy has also secured 2.1 million metric tons of naphtha over the same period, Kang said at a press briefing following his visit as a special presidential envoy to Kazakhstan, Oman, Saudi Arabia and Qatar over the past week.

"In particular, the crude oil and naphtha secured this time will be sourced through ⁠alternative supply routes ⁠unrelated to closure of the Strait of Hormuz, and will therefore make a direct and tangible contribution to stabilizing domestic supply," Reuters quoted Kang as saying.

Saudi Arabia had agreed to ship about 50 million barrels of crude oil already allocated to South Korean companies, using alternative ports near the Red Sea in April and May, Kang said.

Riyadh had also pledged to prioritize South Korean companies in allocating and shipping 200 million barrels of crude oil between June and the end ⁠of the year, and promised to supply as much naphtha as possible through year-end, including 500,000 tons requested by South Korea's government, he said.

Kang said Kazakhstan would supply 18 million barrels of crude oil, while Oman has promised 5 million barrels of crude oil and 1.6 million tons of naphtha.

He said the secured crude oil would be sufficient to power the economy for more than three months under normal conditions based on last year’s usage, while the naphtha volumes were equivalent to about one month of imports.

Kang said the oil and naphtha would be sourced from alternative supply routes not affected by a potential closure of the Strait of Hormuz.

He described his trip as driven by the urgent need ⁠to secure key energy ⁠supplies amid what he called an economic emergency triggered by the conflict in the Middle East.

South Korea relied on the Strait of Hormuz for 61% of its crude oil imports and 54% of its naphtha imports last year, Kang said, adding the government could not afford to wait passively for the regional situation to improve.

President Lee Jae Myung conveyed deep concern over the prolonged Middle East conflict in letters sent to the leaders of the countries visited, expressing solidarity and calling for joint efforts to address the energy security crisis, Kang said.

South Korea also held discussions with oil producers including Saudi Arabia and Oman on cooperation in areas such as constructing bypass pipelines and building oil storage facilities outside the Strait of Hormuz to mitigate risks from a potential blockade.

With additional funding allocated to expand domestic storage facilities, Kang said joint stockpiling with major oil producers could be expanded, helping secure stable supplies.


UAE, Jordan Sign $2.3 billion Aqaba Rail Project Deal

UAE, Jordan Sign $2.3 billion Aqaba Rail Project Deal
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UAE, Jordan Sign $2.3 billion Aqaba Rail Project Deal

UAE, Jordan Sign $2.3 billion Aqaba Rail Project Deal

The United Arab Emirates and Jordan signed on Wednesday an agreement to launch a $2.3 billion rail project to Aqaba port and to create a joint company to build and operate it, the state news agencies in both countries reported.

The agreement covers the construction and operation of a 360-kilometre railway linking the mining areas of Al-Shidiya and Ghor Al-Safi in Jordan to its Aqaba port.

The project aims to transport 16 million metric tons of phosphate and potash annually, with a total investment value of $2.3 billion.

As part of the agreement, the UAE–Jordan Railway Company was launched as a joint venture between several Jordanian stakeholders and L’IMAD Holding Company, Abu Dhabi's newest sovereign wealth fund, the UAE 's state news agency said.

The project is the first step in building the Jordanian national railway network project to connect Aqaba with neighboring Arab countries, and to link the port with those in Syria and the Mediterranean, the Jordanian state news agency said.


Chaired by Saudi Crown Prince, PIF Board of Directors Approves PIF 2026-2030 Strategy

Saudi Crown Prince Mohammed bin Salman - SPA
Saudi Crown Prince Mohammed bin Salman - SPA
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Chaired by Saudi Crown Prince, PIF Board of Directors Approves PIF 2026-2030 Strategy

Saudi Crown Prince Mohammed bin Salman - SPA
Saudi Crown Prince Mohammed bin Salman - SPA

The Public Investment Fund (PIF) Board of Directors, chaired by Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister, has approved PIF’s 2026-2030 strategy, a continuation of the fund’s long-term strategy that will focus on delivering competitive domestic ecosystems to connect sectors, unlock the full potential of strategic assets, maximize long-term returns, and continue to drive the economic transformation of Saudi Arabia and further enhance the quality of life of its citizens.

The 2026-2030 strategy marks a natural evolution as PIF moves from a period of rapid growth and acceleration to a new phase of sustained value creation, with a strengthened focus on maximizing impact, raising the efficiency of investments, and applying the highest standards of governance, transparency and institutional excellence. In addition, PIF will further enable the role of the private sector as an effective partner for sustainable economic development, according to SPA.

Under the 2026-2030 strategy, PIF has structured its investments into three portfolios. The Vision Portfolio aims to leverage synergies across strategic sectors, maximize value for PIF portfolio companies, and continue to drive the growth of the local economy. It will contribute to national priorities through the delivery of six competitive domestic ecosystems and by further integrating PIF’s investments. The Vision Portfolio will unlock new opportunities for the domestic private sector as an investor, partner, and supplier, to further enable its role as an effective partner for sustainable economic development, while also attracting global partners and investors.

The six ecosystems include: Tourism, Travel, and Entertainment; Urban Development and Livability; Advanced Manufacturing and Innovation; Industrials and Logistics; Clean Energy, Water, and Renewables Infrastructure; and NEOM.

The Strategic Portfolio will actively manage key strategic assets to maximize financial returns and the economic impact of PIF’s companies, while supporting their efforts to attract capital and become global champions. Through the Strategic Portfolio, PIF will also continue to invest in opportunities arising from long-term global trends.

The Financial Portfolio will focus on delivering sustainable financial returns to further strengthen PIF’s financial position and continue to grow national wealth for future generations. It will manage PIF’s direct and indirect investments in global markets to maximize returns, while building a more diversified and resilient portfolio. It will further strengthen strategic international partnerships to help attract capital and increase access to global investment opportunities.

PIF Governor Yasir Al-Rumayyan said: "PIF’s strategy continues to deliver results as we grow domestically and internationally. In less than a decade, we have launched unprecedented projects, including giga-projects and major real estate developments, in addition to unique investments in strategic sectors such as artificial intelligence, gaming and esports, and renewable energy. PIF also grew assets under management six-fold and attracted global partners and capital to take part in Saudi Arabia’s transformation."

He added that PIF will continue to support Saudi Vision 2030 objectives by delivering competitive domestic ecosystems, investing in national champions that have the potential to scale globally, and forming global economic partnerships, building on what has been achieved under PIF’s 2021-2025 strategy.

"The 2026-2030 strategy is a natural next step in PIF’s growth journey. It offers our partners more opportunities to invest in high-quality assets and ecosystems, alongside PIF. In the next five years, we will continue to build on our great achievements and strengthen our global leadership to deliver success for PIF and Saudi Arabia," Al-Rumayyan said.

PIF will continue to invest with agility in both local and international markets and maintain its ability to respond to emerging opportunities that benefit the local economy and impact an ever-shifting global economy. It will maintain a disciplined focus on value realization, sustainable returns, enhanced capital efficiency and the highest institutional standards, as it drives innovation and advanced utilization of data and artificial intelligence.

PIF’s 2026-2030 strategy provides a clear strategic direction for the coming decades. It also strengthens PIF’s position as a local and global investor, with a diversified and resilient portfolio that contributes to Saudi Arabia’s long-term economic prosperity. PIF’s unique mandate will remain the same: to drive the economic transformation of Saudi Arabia and generate sustainable financial returns.

The strategy builds on the substantial progress and achievements delivered by PIF under its previous strategies, including increasing grown assets under management from $150 billion in 2015 to more than $900 billion; achieving an annualized total shareholder return of over 7% since 2017; investing more than $199 billion in new projects in Saudi Arabia from 2021 to 2025; contributing more than $243 billion to real non-oil GDP from 2021 to 2024, equivalent to around 10% of Saudi Arabia’s total non-oil GDP in 2024; spending together with its portfolio companies more than $157 billion with the local private sector from 2021 to 2024; expanding PIF’s global presence in priority markets with subsidiary company offices in North America, Europe, and Asia to deepen PIF’s ties in international markets and continue to invest in sectors, industries, and companies shaping the future of the global economy; and being one of the few sovereign wealth funds with strong credit ratings from each of the world’s top three rating agencies. Moody’s rated PIF Aa3 with a stable outlook, while Fitch rated PIF A+, also with a stable outlook