Fed rate cuts may need the Iran war to end first, according to a Morgan Stanley Investment Management portfolio manager quoted by Business Insider on May 10.
Andrew Slimmon's view is that cuts could still happen by year-end if the war ends soon, but he expects roughly a six-month lag between geopolitical relief and a Fed move.
What happened
The call lands after a stronger-than-expected April jobs report, elevated energy prices and a Fed statement that explicitly linked inflation uncertainty to Middle East developments.
Why it matters
The stock rally can keep climbing without immediate cuts, but the valuation math changes if investors have to wait longer for monetary easing. That is why the endgame in Iran matters for both oil and duration.
Market impact
Business Insider reported that fed funds futures were pricing no cuts by December and cited 74% odds of no change after the April jobs report. That means any genuine peace dividend could be more powerful because cuts are not fully priced.
Key numbers
- Slimmon's expected policy lag: roughly six months after the Iran war ends, according to Business Insider.
- Fed target range: 3.50% to 3.75% after the April 29 meeting.
- April payrolls: +115,000, according to BLS.
- April unemployment rate: 4.3%, according to BLS.
- Business Insider cited 74% odds of unchanged rates by December after the jobs report.
Institution angle
The institutional angle is timing. If cuts are delayed but not cancelled, investors may favor quality growth and duration selectively. If oil keeps inflation high, the no-cuts case gets harder to fight.