Bloomberg Surveillance · Tuesday, September 8, 2026
Jim Caron of Morgan Stanley Investment Management believes the upcoming Federal Reserve meeting's significance lies in its signaling rather than a potential rate hike, as markets have largely priced in a 60% probability of a hike. He emphasized that the crucial question is whether a hike would signal a prolonged campaign of increases or a mere fine-tuning, impacting market sentiment more than the action itself.
“I think the markets have priced that there's a 60% probability that the Fed's going to hike rates next week.”
“But what I think is the more important, and I really think it's a two-part question. What I think the more important part to that question is, is if they hike interest rates, How many do they go? Like how many how many times do they hike interest rates going forward?”
“So it's one of these questions of, you know, listen to what they say. Don't watch what they do. What they do is going to be less relevant than what they actually say. Because this is really about signaling. And that's the key that the market has to sort of catch up with right now.”