Are US bonds going to rise? Morgan Stanley Report: “10-year US Treasury bond yield” expected to fall to 3.75% in mid-2025

Table of Contents

• 0.1 US bond prices fell instead of rising
• 0.2 Morgan Stanley expects 10-year US Treasury bond yield to fall to 3.75%
• 0.3
• 0.4 The Fed cuts interest rates 64 times in December
• 1 What ⁤are the main drivers behind the recent ‌surge in US Treasury yields, and how might they‍ affect ⁣both domestic and‌ international investment ‌strategies?

The American financial institution Morgan Stanley recently released its Global Strategic Outlook 2025 Report. In the report, Morgan Stanley analysts expected the 10-year US Treasury bond yield to fall to 3.75% by mid-2025, and the Fed is expected to cut interest rates by 75 basis points in the first half of 2025.
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(Development background:Will US bonds fall again if Trump wins the election? Analyst: Long and short term factors contribute to uncertainty )

beautifulThe Federal Reserve (Fed) announced a 2-point interest rate cut in September, reducing interest rates to 4.75% to 5%, completing the first interest rate cut since 2020. In November, they announced another 1% cut in interest rates to 4.5% to 4.75%, following a new round of interest rate cuts.

US bond prices fell instead of rising

However, after the Federal Reserve officially launched an interest rate cut cycle in September, the price of US debt did not rise as expected analysis that possible reasons also give a- enter:

• The US Treasury continues to issue debt to fill the government deficit (if Trump returns to the White House, the US fiscal deficit could increase again)
• The Fed’s attempt to reduce its balance sheet has eliminated significant demand to buy Treasury bonds, resulting in
• Recent economic data shows that the effectiveness of the fight against inflation remains stagnant

Morgan Stanley expects 10-year US Treasury bond yield to fall to 3.75%

But according to the Wall Street Journal earlierreportAmerican financial institution Morgan Stanley recently released its Global Strategic Outlook 2025 Report. In the report, Morgan Stanley analysts predicted:

The 10-year US Treasury yield is expected to fall to 3.75% by mid-2025 and slightly above 3.5% by the end of next year. The Fed is expected to cut interest rates by 75 basis points (3 basis points) in the first half of 2025.

According to MacroMicro datalookThe most recent yield on the 10-year US Treasury bond is 4.44%. analysts at Morgan Stanley predict that the 10-year US bond yield will drop to 3.75% after 8 months Does it mean the bond market is about to get out from the bottom?

The Fed cuts interest rates 64 times in December

According to BloombergreportEd Al-Hussany, strategist at Columbia Threadneedle, an American management company:

The US Treasury market is struggling to find direction, with too much uncertainty weighing on the market.

In addition, Fed Chairman Jerome Powell issued a hawkish statement on the 15th, saying that if economic data permits, it is wise to cut interest rates slowly, which gave the market a sixty-fourth wave in December interest rate cut forecasts.

According to CME Fedwatch lookthe market estimates the probability of no interest rate cut in December to be 38.1%, and the probability of a single-digit rate cut is 61.9%, which is far from the market’s forecast of 82.5% of a cut 1-digit rate on the 14th.

Further reading:Bauer warns “no rush to cut interest rates” Bitcoin drops $86,600, US stocks tumble, October PPI shows inflation remains sticky

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