MS · News · 20261019N

Interest Rate Outlook

MORGAN STANLEY · 2026-10-19 · Importance 18 · Surprise 24

Morgan Stanley Investment Management said rising U.S. Treasury yields primarily reflect strong nominal economic growth rather than financial stress. It estimated combined U.S. growth and inflation at approximately 6.5%, favored U.S. and Japanese equities, and remained underweight Europe and duration. The firm also said the private-credit correction appeared complete, implying that higher yields remain absorbable while corporate earnings stay resilient.

Key facts

• Morgan Stanley Investment Management favors US and Japanese equities and is underweight Europe and duration. source
• Morgan Stanley strategist Michael Wilson advised investors to prepare to add risk as a months-long pullback in parts of the equity market nears an end. source
• Morgan Stanley Investment Management says it sees the private credit correction as complete. source
• Morgan Stanley chief equity strategist Michael Wilson said the S&P 500 Index is only 2% shy of its all-time high. source
• Morgan Stanley Investment Management says US growth plus inflation is around 6.5%. source