📝 Base Case 2-Year Yield Scenario Revised to 4%: Morgan Stanley

Adjusting Treasury yield forecasts to reflect a more front-loaded path for the Fed hike cycle, with the terminal rate reaching 3.625% end of 2022. Base-case 2022 forecast sees the 2-year yield at 4%, 10-year yield at 3.5%. Recommend 1s10s flatterers to account for significant front-loading in Fed policy. - Morgan Stanley Rates Strategy