In a report released on Sunday, Morgan Stanley (MS) economists say they don’t expect the Federal Reserve to raise interest rates until 2023.

What Happened

Strategist Andrew Sheets says Morgan Stanley’s economics team is forecasting that the Fed will halt its asset purchases by the middle of 2022. The outlook anticipates the central bank will begin raising interest rates in early 2023.

The analysis is in contrast to the expectations of Morgan Stanley CEO James Gorman, who last month said the Fed should “start moving” in the first quarter of 2022. He also voiced his concern that “money is a bit too free and available right now.”

In early November, both the Fed and the Biden administration reiterated their position that inflation would be short-lived, arguing that the increase in prices is due primarily to the momentary global supply-chain crisis.

What’s Next

The bank's economists are anticipating inflation to increase at a moderate rate, their forecast also predicts a growing number of workers will participate in the labor market. They expect the U.S. economy to grow 4.6% next year, fueled by consumer spending and capital investment.

Meanwhile, rising inflation has been eroding the purchasing power of Americans over the last 12 months. Last week’s data from the consumer price index (CPI) jumped 6.2% from a year ago.