Market Outlook: Morgan Stanley Continues to Predict Greater Rate Cuts by the Fed than Anticipated

Morgan Stanley (NYSE:MS) Research expects U.S. Treasury yields to decline as they anticipate that the Federal Reserve will implement more interest rate cuts than priced in by the markets. They are advising an "increase in allocation" for G10 government bonds. Commenting on a similar situation in Europe and the UK, Morgan Stanley economists stated, "The potential downward risks to growth from trade and immigration reforms suggest that the short end of the U.S. Treasury yield curve will likely trend lower, while the U.S. yield curve will steepen."