Opinion: Easing Tariff Pressure Opens Space for Fed Rate Cuts, Recession Risk "Significantly Reduced"

According to a report by Jinse Finance, Morgan Stanley's Chief Investment Officer Mike Wilson believes that the historic sell-off triggered by Trump has ended. He reiterated his prediction that the S&P 500 index will reach 6,500 points by the end of the year (a 12% increase from the current level) and pointed out that the easing of tariff pressures opens up space for the Federal Reserve to cut interest rates, which will directly benefit risk assets such as stocks. Wilson stated, "If the tariff threat diminishes, the Federal Reserve can rebalance its dual mandate. Although the growth outlook is slightly optimistic, the policy balance may lean more towards stimulating the economy rather than curbing inflation." He particularly emphasized that with the weakening of the dollar and the progress of Sino-US negotiations, the risk of economic recession has "significantly reduced," and corporate earnings expectations have improved: "From the perspective of rating adjustments, the performance in the second half of the year is likely to exceed expectations, especially since the first half was really bad." (Jin10)