Woofun AI reports that market consensus on Federal Reserve policy has fractured, with Morgan Stanley projecting no rate increases for the year while Deutsche Bank highlights risks from balance sheet reduction. Former NY Fed President William Dudley argues that persistent core inflation and AI-driven cost pressures justify maintaining tight policy, despite cooling labor data. Conversely, Morgan Stanley’s Michael Gapen anticipates a pause in rate adjustments, citing diminishing tariff impacts and natural market tightening. Deutsche Bank’s George Saravelos cautions that a shift toward quantitative tightening rather than rate hikes may exert downward pressure on the US dollar.