Morgan Stanley strategist Michael Wilson said that the mild weakness in US employment data this week may fuel bullish sentiment in the stock market, as this will increase the possibility that the Federal Reserve will cut interest rates further. Investors are awaiting clues from relevant data to determine whether the Federal Reserve is about to end loose monetary policy after cutting interest rates three times in a row, or whether more aggressive measures must be taken. “We are now firmly back in a situation where good is bad/bad is good,” Wilson wrote in a report, explaining that while a labor market boom is beneficial to the economy, it will reduce the possibility of interest rate cuts in 2026.

Morgan Stanley strategist Michael Wilson said that the mild weakness in US employment data this week may fuel bullish sentiment in the stock market, as this will increase the possibility that the Federal Reserve will cut interest rates further. Investors are awaiting clues from relevant data to determine whether the Federal Reserve is about to end loose monetary policy after cutting interest rates three times in a row, or whether more aggressive measures must be taken. “We are now firmly back in a situation where good is bad/bad is good,” Wilson wrote in a report, explaining that while a labor market boom is beneficial to the economy, it will reduce the possibility of interest rate cuts in 2026.