Morgan Stanley Says Fed Would Discount Iran War Impact

Morgan Stanley's global head of fixed income research says the Federal Reserve would likely discount Iran war effects on prices when considering interest rate hikes this year. The Fed would focus on underlying economic fundamentals rather than temporary geopolitical price shocks. This view supports USD strength as it suggests Fed policy remains data-dependent on core inflation and employment rather than oil-driven price spikes. Dollar pairs could see volatility as traders reassess hawkish Fed expectations.