Morgan Stanley Strategists Recommend Buying Five-Year U.S. Treasuries

Morgan Stanley strategists have advised investors to purchase five-year U.S. Treasuries at a yield of 4.06%, according to Jin10. Tradeweb data shows the latest transaction price for the five-year Treasury yield at 4.022%. The strategists also suggest betting on a steepening curve from the seven-year to the 30-year U.S. Treasuries, entering at a level of 71 basis points. The strategists noted that since February 27, U.S. Treasury yields have risen alongside energy prices. However, they believe that the recent pricing trends in the one-year/one-year U.S. CPI inflation swap indicate increasing downside risks to growth, which stock indices are beginning to reflect. They argue that if energy prices continue to rise, the risks to growth will further escalate.