Morgan Stanley Spots Warsh Fed Hearing as Catalyst for Treasuries under 4.25%
US 10-year Treasury yields dipped below 4.25% after a Middle East ceasefire eased war-driven oil shocks. Morgan Stanley strategists say Kevin Warsh’s Senate confirmation hearing will be the next catalyst for bond markets based on his rate cut and inflation stance.
1. Treasury Yield Movements
US 10-year Treasury yields had risen sharply following the outbreak of conflict in the Middle East, driven by spikes in oil prices, but have since retreated to just under 4.25% as ceasefire talks and hopes for a peace deal alleviated energy-driven inflation pressures.
2. Morgan Stanley Analyst Commentary
A Morgan Stanley team led by Michael Gapen and Lingdi Xu identifies Kevin Warsh’s upcoming Senate confirmation hearing as the next major market catalyst, noting that his views on rate cuts versus inflation vigilance will directly influence traders’ positioning in short- and long-dated Treasuries.