Aug
18
Morgan Stanley Says Fed Rate Bets Too High, Buy Five-Year Notes
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Wall Street firm sees market odds of 2016 hike falling to 30%
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Two-year yields will drop to 0.65 percent, strategists say
Morgan Stanley says investors are overestimating the chances of higher U.S. interest rates this year and should buy five-year Treasury notes.
From coin-flip odds of a rate increase by December, the New York-based bank’s strategists predict the probability will drop to 30 percent in coming weeks as inflationary pressures remain absent from the world’s biggest economy. Benchmark Treasuries held gains on Thursday after minutes of the Federal Reserve’s July meeting published the previous day showed officials saw little risk of a sharp uptick in consumer prices…
