Morgan Stanley has projected that the 10-year U.S. Treasury yield will decline to 3.75% by mid-2025, reflecting expectations of easing inflationary pressures and potential shifts in Federal Reserve policy.
As of November 2024, the benchmark yield stands at approximately 4.30%, underscoring the potential for a significant decrease over the next 18 months. The anticipated decline is based on Morgan Stanley's analysis of economic indicators and market conditions, suggesting that the Federal Reserve may maintain a more accommodative stance to support growth.
Falling Treasury yields could lower borrowing costs for businesses and consumers, influencing investment strategies and overall economic momentum. This development comes amid broader market expectations of stabilizing inflation and reduced pressure on interest rates.
Investors are keeping a close watch on Treasury yield trends, as they play a critical role in shaping financial markets and impacting returns across various asset classes.