Morgan Stanley expects the 10-year Treasury yield to fall to 3.55% next year, down from 3.75% previously, as they expect the Federal Reserve to cut interest rates more than the market expects. The Morgan Stanley team also had an interesting take on the U.S. Department of Government Efficiency and its leaders, Elon Musk and Vivek Ramaswamy, saying: "While many doubt they can actually cut spending by improving efficiency, we think it makes sense to take a more open approach, given the individuals involved and the fact that this appears to be the focus of Trump's second term. As the final outcome is inconclusive, we think the term premium will shed light on how the bond market views this issue. "