Morgan Stanley joins Goldman Sachs in 11th-hour switch to forecasting a Fed hike

JUST IN: Morgan Stanley joins Goldman Sachs in an 11th-hour switch to forecasting a Federal Reserve rate hike this week, reversing its earlier call for rates to stay unchanged.

Morgan Stanley just flipped its Fed call. Days before the meeting.

The bank had been telling clients rates would stay on hold this week. Now it's forecasting a hike, and it's not alone. Goldman Sachs made the same eleventh-hour switch, so two of the biggest names on Wall Street have torn up their forecasts with the meeting practically underway.

Think about what that means. These desks employ armies of economists whose entire job is to see this coming, and they changed their minds at the door. When Goldman moves you notice. When Morgan Stanley follows within days, that's not a hunch anymore, that's the street repricing the Fed in real time.

All eyes on Jerome Powell now, because if the banks are right, borrowing costs across the entire economy are about to get heavier, not lighter. And if they're wrong, two very expensive research departments just blinked at nothing.

This is Sara White, reporting for HIT.