Markets can support a higher multiple as productivity increases, says Morgan Stanley's Jim Caron

分组1 - The Federal Reserve's decision-making process is influenced by a wide dispersion of views among its members, indicating confusion about the current state of the US economy [2][4][3] - The consensus within the Federal Reserve remains strong, with only one dissenting vote, suggesting a unified approach despite individual ambitions for leadership positions [5][6] - The Phillips curve framework is being utilized by the Fed, indicating that rising unemployment may lead to lower wage inflation and consumer inflation, allowing for potential rate cuts [7][8] 分组2 - Productivity is expected to rise, which could support higher profit margins and a bullish outlook for equity markets, as higher productivity correlates with growth [9][10] - Small-cap stocks are showing significant movement, with the SML small cap 600 index up 2%, indicating that domestic companies may benefit later in the rate cut cycle [12] - The bond market remains relatively stable, with the 10-year yield at 4%, suggesting limited immediate relief for mortgage rates despite expectations of easing from the Federal Reserve [13][14]