By Seth Carpenter, Morgan Stanley chief global economist

Conversations in the past few days have centered on whether the market has stabilized. The Fed highlighted the risks to slower growth and higher inflation that the market had already internalized, so … is the worst over? 

The Fed dot plot was largely in line with Morgan Stanley US Economics' views of weaker growth and firmer inflation. The question for investors is whether the storm has passed or if we are in its eye. My view is that the market got the right answer on the economic slowdown in the US, but for the wrong reasons. The real slowdown has yet to show up in the hard data. Our equity strategists also caution about further risks to earnings downgrades. We think there is more bad news to come for the US economy as substantial shifts in policy wend their way through the economy.