Morgan Stanley: The Federal Reserve's subsequent rate cuts may be lower than market expectations. Morgan Stanley stated that the current 10-year U.S. Treasury yield is close to 4%, which may be too low relative to the outlook for the U.S. economy. Economic growth in 2026 is facing increasingly favorable tailwinds. "Stronger growth combined with stubborn inflation is likely to result in the Federal Reserve cutting rates by less than the current market pricing over the next 12 to 18 months." Against this backdrop, Morgan Stanley Investment Management has adopted an underweight position on U.S. Treasuries.