Morgan Stanley saw a plunge of more than 60% in its U.S. rates trading business last year, fueled by a fourth-quarter flop in one of its most complex desks, as uncertainty about how the Federal Reserve would combat inflation wreaked havoc across Wall Street.
The firm’s U.S. structured rates book suffered about $50 million of losses in the last three months of the year, leaving that area in the red for 2021, according to people with direct knowledge of the performance. The rates performance was a blemish on a set of results otherwise cheered by investors for delivering record profit and revenue last year.
