Financial giants from Goldman Sachs & Co. to Morgan Stanley and Barclays Plc. are taking a fresh look at how a Donald Trump victory in November could play out in the bond market.
After last week’s debate hurt President Joe Biden’s chances of winning reelection, Wall Street strategists are urging clients to position for sticky inflation and higher long-term bond yields.
At Morgan Stanley, strategists including Matthew Hornbach and Guneet Dhingra in a weekend note argued that “now is the time” to wager on long-term interest rates rising relative to short-term ones.
Trump’s rise in the polls since Thursday’s debate means investors have to contemplate economic policies that could lead to more rate cuts from the Federal Reserve, along with a Republican sweep that leads to fiscal expansion and pressures longer-term bond yields higher, Morgan Stanley said.
Barclays, meanwhile, said that the best response to…
