Earlier this month, the Federal Reserve slashed interest rates by 50 basis points at its September Federal Open Market Committee meeting, lowering the federal funds rate in the range of 4.75%-5%.

The Fed also hinted at the potential for additional cuts in the coming months, with the updated dot plot revealing a more aggressive rate-cutting trajectory than forecasted in June.

Morgan Stanley economists anticipate an additional 150 basis points of rate reductions by mid-2025, with the U.S. economy steering clear of a recession.

Morgan Stanley highlights the banks expected to see the greatest net interest margin (NIM) expansion or compression through...