Treasury Investors Anticipate Fed Shift Back to Growth Risks
- Morgan Stanley says US 10-year yield can fall back below 4%
- Expectations for interest-rate cuts this year are rising again
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Investors in US government bonds are starting to bet the Federal Reserve will soon need to pivot from worrying about sticky inflation to fretting about slowing economic growth.
That sentiment helped drive Treasuries to gain for a sixth straight session, which has pushed yields to their lowest levels of the year. Meanwhile, strategists at Morgan Stanley say the 10-year has scope to fall back below 4% if the prevailing view on the Fed shifts somewhat.