Bloomberg Talks Morgan Stanley Chief US Equity Strategist Mike Wilson Talks Fed Rate Cuts
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Nov 3, 2025 
Mike Wilson, Chief U.S. Equity Strategist at Morgan Stanley, dives into critical insights on the economy and Federal Reserve policies. He argues that the Fed is lagging in rate adjustments, which hampers broader recovery. Wilson explains the transition from consumption to capital investment, emphasizing a robust, evolving economy. He also discusses the implications of rising capex in tech and how it affects market leadership, while highlighting the potential for a sustained recovery if the Fed cuts rates. Tune in for a fascinating economic outlook!
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Staged 'Rolling Recovery' Explained
- Mike Wilson calls the US recovery a "rolling recovery" where different sectors revive in stages rather than all at once.
- He argues the private economy suffered a multi-year rolling recession that culminated in April before this staged rebound.
Fed Needs Substantial Rate Cuts
- Wilson says the Fed is "way behind the curve" because policy rates exceed two-year Treasury yields, hampering the private economy.
- He estimates cuts of ~50 bps to reach neutral and 100+ bps more to meaningfully stimulate broad private-sector activity.
Position For A Broader CapEx-Led Recovery
- Expect capital spending to broaden economic gains beyond AI and semiconductors into infrastructure and small-business lending.
- Consider rotations into early-cycle and mid/low-quality stocks once Fed funds falls below two-year yields.