morgan stanley thinks the fed is still likely to pause for rest of the year will a strong jobs report push the federal reserve to keep raising interest rates rather than skipping a rate increase later this month morgan stanley doesnt think so ellen zentner chief us economist for the bank is sticking to her call that the fed will leave interest rates unchanged at its june meeting and stay on pause for the rest of the year zentner then expects the fed to begin cutting rates in the first quarter of 2024 while payroll numbers were undeniably strong the fomc will also be focused on the unemployment rate zentner wrote in a note the unemployment rate rose more than economists expected in may moreover the fomc tends to operate under the law of inertia zentner added once it stops hiking it will be difficult to resume especially in the very next meeting