Be a Goldfish

Research evidence excerpt

Be a Goldfish

Idea

July 23, 2026 10:30 AM GMT

Morgan Stanley & Co. LLCMMunicipal Strategy | North America Mark T Schmidt, CFA

Strategist

Be a Goldfish Mark.Schmidt1@morganstanley.comMorgan Stanley India Company Private Limited+ +1 212 296-8702

Gowtami P Pyla

Markets have short memories – fear of hikes may fast fade away. StrategistGowtami.Pyla@morganstanley.com +91 22 6995-2290

Duration looks better, but don't be bold: oil price vol could still Samyuktha Gopal

cause a slip-up in 30Y munis. And if the Fed did hike, de minimis Strategist

Samyuktha.Gopal@morganstanley.com +91 22 6995-2022

tax in 30Y would bite. Roll down the curve; we suggest owning Morgan Stanley & Co. LLC

munis inside 22Y. Eli P Carter

Being long muni duration "is a lot like riding a horse: If you’re comfortable while Eli.Carter@morganstanley.com +1 212 761-4703

you’re doing it, you’re probably doing it wrong." Suffice it to say, owning longer- Matthew Hornbach

maturity muni bonds has been a bumpy ride. And judging from the new issue market Matthew.Hornbach@morganstanley.com +1 212 761-1837

this week, there could be a few more bumps ahead in the muni ratio. Martin W Tobias, CFA

But markets, like goldfish, have short memories – and pretty soon they may Martin.Tobias@morganstanley.com +1 212 761-6076

quickly move on from the three hikes brouhaha. Our colleagues in US Rates

strategy spot a budding bull market for bonds:

• Inflation seems to have peaked – and trimmed-mean inflation may skirt

2.3%

Related Reading:

• Investors may be reading too much into Fed speak – hawkish can mean

US Rates Strategy: Three Hikes? You're Out (17

hold

Jul 2026)

US Rates Strategy: Crude Oil → Fed Policy

They think the pendulum has swung too far towards optimism in the labor market.

Pricing → UST Yield Linkage Returns (10 Jul