Morgan Stanley: Bonds Set to Surge in 2016

The video discusses the global economic outlook, focusing on bond yield forecasts and the Federal Reserve's potential actions. It highlights market reactions to economic conditions, the impact of low treasury supply, and central bank interventions. The discussion also covers China's treasury sales and their effects on global markets, as well as the Federal Reserve's balance sheet strategy and its implications for monetary policy.

What was the predicted US 10-year yield by the end of September according to the firm?

• 1.25%

• 1.45%

• 1.75%

• 2.00%

Why do people expect the Federal Reserve to hold back on raising rates?

• To increase inflation

• Because of weaker economic numbers

• To boost the stock market

• Due to strong job growth numbers

How does global QE affect US interest rates?

• It increases US interest rates

• It has no effect on US interest rates

• It causes US interest rates to fluctuate wildly

• It suppresses US interest rates

What is one reason for the low supply of Treasurys?

• The Federal Reserve holding many of them

• Increased production costs

• High demand from banks

• Lack of interest from foreign investors

What happens to dollars when China sells Treasurys?

• They disappear from the market

• They are converted to euros

• They cause interest rates to spike

• They reappear in the treasury market