Morgan Stanley Predicts Hot U.S. Inflation Data for April

Morgan Stanley's Global Macro Strategist, Matt Hornbach, anticipates that the U.S. inflation data for April will be notably 'hot.' According to Jin10, this data is the first in a series of reports that will ultimately contribute to the Federal Reserve's key inflation measure, the core PCE price index. Hornbach noted that historically, companies have not always passed inflationary pressures onto consumers. This situation is similar to when the U.S. government imposed tariffs, and consumer prices did not rise as sharply as expected. Currently, companies are facing significant pressures from rising energy costs and AI infrastructure development expenses. However, it remains uncertain whether businesses can fully transfer these costs to consumers. As a result, Morgan Stanley still forecasts that the Federal Reserve will maintain interest rates unchanged this year.