Morgan Stanley Sees US Bonds Less Exposed to Any Big Trump Win
- US yields are unlikely to rise dramatically given Fed policy
- Treasuries plunged after Trump took House and Senate in 2016
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US Treasuries are better positioned to resist any selloff sparked by a decisive election victory for Donald Trump’s Republican party, given the Federal Reserve’s current policy outlook, according to Morgan Stanley.
The bank is recommending investors maintain a neutral stance on US bonds going into the Nov. 5 vote, saying the market is unlikely to react as violently as it did after Republicans won both the House and Senate in 2016. While that led to bets on much tighter Fed policy, it argues this time will be different.