Morgan Stanley has joined a growing bloc of global brokerages forecasting a September interest rate cut by the U.S. Federal Reserve, citing Chair Jerome Powell's shift in tone toward labor market risks at the Jackson Hole symposium.

On Friday, Federal Reserve Chairman Jerome Powell indicated the possibility of interest rate cuts in the coming months.

Now that Federal Reserve Chair Jerome Powell has signaled that the central bank could soon cut its key interest rate, he faces a new challenge: how to do it without seeming to cave to the White House’s demands.