04:36 PM EDT, 03/20/2024 (MT Newswires) -- The US Federal Reserve's policy and rate-setting committee acknowledges the supply side narrative in their projections, expecting three rate cuts in 2024 while foreseeing higher rates persisting for a longer duration, Morgan Stanley said in a note emailed Wednesday.

The Federal Open Market Committee left interest rates unchanged, as Morgan Stanley expected, "and the summary of economic projections showed a stronger supply side story," it said. The growth outlook was revised up by 70 basis points to 2.1% this year, while inflation only saw a 20 basis point increase to 2.6% year-over-year.

Uncertainty surrounding core personal consumption expenditures inflation remains comparable to the previous summary of economic projections, but risks are slightly tilted towards the upside, Morgan Stanley said, adding that the difference in its projection and the FOMC's comes down to core PCE inflation, the bank expects 2.4% this year compared to the FOMC's 2.6%.