One of Morgan Stanley's (MS.N) most senior executives said he believes the U.S. Federal Reserve will begin lifting its interest rate targets in September - and may raise them a second time before the end of the year.
"There's a lot of momentum in the U.S. economy and animal spirits – that wonderful phrase – seem to be kicking in," Greg Fleming, president of Morgan Stanley's wealth and asset management businesses, said in New York at the Reuters Wealth Management Summit on Tuesday.
"From my vantage point, yes, I do think they'll go in September," he said, adding that the Fed "could" raise rates again in December, depending on the strength of economic data.
Fleming's view differs from Morgan Stanley's economists, who believe the Fed will first raise rates in December.
He cautioned that his view might be overly optimistic, and that he was not giving proscriptive advice on how to adjust investment portfolios. Six or 12 months ago, Fleming would have guessed rates would rise sooner, he said.
Fleming has not been alone in that optimism. Since 2009, most Wall Street executives and economists have been poor forecasters about how soon the Fed would start raising interest rates.
"People thought in '09 that in 2010, it might go to a normal cycle," he said. "Six years later, you're still at zero rates."
(Editing by Jonathan Oatis)
