Morgan Stanley Identifies Forced Selling in Treasury Market

Interest-rate strategists at Morgan Stanley have observed signs of forced selling in the Treasury market this month. Bloomberg posted on X, highlighting that the yields on two-year notes have surged as traders shifted their expectations from Federal Reserve interest-rate cuts to anticipating a rate hike. This change in market sentiment has led to a significant sell-off, impacting the overall performance of the Treasury market. The strategists noted that the current market dynamics reflect a broader reassessment of monetary policy expectations.