Morgan Stanley strategists said in a report that they currently recommend a neutral stance on U.S. Treasuries until the impact of the Middle East conflict on the economy and the Federal Reserve's interest rate path becomes clearer. They stated, "We tend to remain neutral on U.S. Treasuries until we have a clearer understanding of the impact of the Iranian conflict on Fed policy and (equally important) fiscal policy." They also suggested that speculation about further fiscal stimulus might explain why U.S. Treasuries have not reacted to risk aversion as expected. They added, "Of course, the absence of a dovish Fed is also unfavorable for using U.S. Treasuries as a hedge against riskier assets." (Jinshi)