@0xsunbig

U.S. bond investors are starting to bet that the Fed's policy focus will shift from curbing inflation to responding to slowing economic growth. In anticipation of this, U.S. bonds have risen for six consecutive trading days, with yields falling to their lowest level of the year. Morgan Stanley strategists said that if the market's expectations of the Fed's policy change slightly, the 10-year Treasury yield may fall below 4%. Traders have now resumed their expectations that the Fed will cut interest rates twice this year (25 basis points each), and expect further rate cuts to about 3.65% next year. The bank believes that if the market expects interest rates to fall to 3.25%, the 10-year Treasury yield may fall below 4%.

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