Michael Gapen, Morgan Stanley's Chief U.S. Economist, suggests that although the Federal Reserve currently appears hawkish, there is a possibility of a shift to a more dovish approach in the near future. Gapen analyzed the latest Personal Consumption Expenditures (PCE) report, noting positive signs with a modest increase of 0.1. He sees a trend toward disinflation that could impact the Fed's decisions. Gapen also mentions that the Fed does not expect to reach its 2% inflation target by 2027. Overall, the Fed's stance is not fixed and could change depending on various economic factors.



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