The strategists see range-bound Treasury yields until the final quarter of this year, when it expects investors to price in more US rate cuts for 2026. That’s likely to push the 10-year yield down to 3.45% by the second quarter of next year, according to their note dated May 20.
Morgan Stanley has raised its call on US stocks and Treasuries on expectations that a slew of future interest-rate cuts by the Federal Reserve will support bonds and boost company earnings.
The Wall Street bank has turned overweight on American stocks and sovereign bonds from a neutral stance, according to a note from strategists including Serena Tang, global head of cross-asset strategy research. The S&P 500 Index will reach 6,500 by the second quarter of 2026, they wrote.
