2023-10-19 14:40:03
Bloomberg reported on Thursday (19th) that Morgan Stanley Investment Management said that if the United States 10-year U.S. Treasury yieldRising to 5% or higher is a good entry point for investors.Before deadline, the United States 10-Year Treasury Bond Yieldrose to 4.943%.
Vishal Khanduja, a fund manager and co-head of the bank’s broad markets fixed income team in Boston, said that under current conditions, from a duration perspective, this would be the best price for a long-term investment deal.if 10-year U.S. Treasury yieldIf it rises above 5%, the market will be in overshoot territory and exceed the company’s fair value for U.S. Treasury yields.
USA 10-year U.S. Treasury yieldIt is rapidly approaching the 5% mark, sparking debate over how much higher U.S. bond yields can go as Federal Reserve officials pledge to keep interest rates high for longer. Traders trying to time the market must weigh relative factors as conflict in the Middle East fuels safe-haven buying and ballooning U.S. debt pushes up bond supply.
Specifically, the United States 10-year bond yieldThe stock price soared by more than 30 basis points, reaching 4.98% on Thursday, a new high since July 2007. Traders are awaiting comments from the Fed chairman later to further clarify the outlook for monetary policy.
While Khanduja thinks 5% is a good entry point, he also has a riskier bet. Morgan Stanley Investment Management predicts that the yield curves for 2-year and 10-year U.S. Treasuries will become steeper. And that trade paid off,10-year U.S. Treasury yieldThe surge narrowed the spread to the 2-year note to minus 28 basis points from more than 100 basis points when the strategy was implemented.
“We definitely think it will reverse back into contango, but it may be a little longer,” Khanduja said. “Currently the company believes the Fed may only cut rates in late 2024 or early 2025.”
However, he also said that the Fed’s most aggressive rate-raising cycle since the 1980s may be over, as the steepening curve and term premium have completed the task of tightening monetary policy for the Fed.
Khanduja helps oversee some of Morgan Stanley Investment Management’s strategies, including the Calvert bond fund, which has gained 1.1% over the past year, beating 85% of its peers.
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