Morgan Stanley Research discusses its Fed rate outlook after Fed Warsh's remarks at Jackson Hole.

"Our economists expect that the data releases between now and the September FOMC meeting will meet the bar that Chairman Warsh laid out: that underlying inflation is moving to the Fed's 2% objective, clearly and at sufficient speed. As a result, we don't think the Fed will hike rates in September, which should lower front-end US yields relative to yields abroad since roughly +15bp are currently priced for the September FOMC meeting," MS notes.

"Therefore, we think the USD can decline broadly in line with front-end US yields, given the broad relationship between the USD and front-end yield differentials so far this year," MS adds.