In a recent report, Morgan Stanley highlights the Federal Reserve's decision to maintain the federal funds rate at 4.25-4.50%, noting subtle shifts in the Fed's language that suggest a cautious approach to future policy adjustments. The 10-Year Treasury Yield (TNX) remained relatively unchanged at 4.528% following the Fed's January meeting, as market participants digested the removal of language indicating progress toward the Fed's inflation target. Morgan Stanley economists revised their 4Q24 GDP growth estimate to 1.7% annualized, down from 2.6%, due to a record merchandise trade deficit. Despite these developments, Fed Chair Powell emphasized that the policy rate remains "well calibrated" to achieve the Fed's dual mandate, with no immediate need for further labor market weakening to reach the 2% inflation goal. The report suggests that the Fed's current stance reflects a balanced view of risks, with Powell indicating that the Fed is not in a hurry to adjust the policy stance further.