Morgan Stanley Chief Investment Officer Mike Wilson said the Department of Government Effectiveness (DOGE), led by Elon Musk, could play a key role in revitalizing the U.S. economy. Wilson said in an interview that Morgan Stanley's optimistic outlook includes government cuts that could lead to higher unemployment and prompt the Federal Reserve to lower interest rates.
Wilson noted that DOGE has identified tens of billions of dollars in government waste.
He believes achieving a balanced federal budget could spur market growth in 2025, similar to economic growth after the Clinton administration's 1994 budget cuts.
"Probably the most underrated department in government is DOGE. I think there's a lot of skepticism about it, but the reality is, it's probably the most optimistic thing that could happen," he said.
He stressed that while specific budget cuts were not necessary, slowing spending growth was crucial. The U.S. national debt currently stands at $36.2 trillion, having increased by nearly $2.1 trillion over the past year.
"We just need to freeze spending, we really don't need to cut a lot of spending," Wilson added.