Morgan Stanley: US Treasury yields are currently low; subsequent Fed rate cuts may be less than market expectations.

Morgan Stanley Investment Management stated in its outlook report that the current 10-year US Treasury yield, near 4%, may be too low relative to the US economic outlook. The company believes that economic growth in 2026 is facing increasingly strong tailwinds. "Stronger growth combined with persistent inflation is likely to lead the Federal Reserve to cut interest rates less than currently priced in by the market over the next 12 to 18 months." Against this backdrop, Morgan Stanley Investment Management has adopted an underweight position on US Treasuries. (Jinshi)