Morgan Stanley's latest global economic briefing forecasts a significant decline in the US 10-year Treasury yield, projecting it to fall from the current 4.54% to 3.55% by the fourth quarter of 2025. This anticipated drop is attributed to a dovish shift in central bank policies amid ongoing economic uncertainties, including potential tariff implementations. "Central banks around the world continue to lower policy rates in our economists' baseline projection," Morgan Stanley analysts note, suggesting a trend towards more dovish outcomes for yields. The report highlights that if higher tariffs prove durable, the USD may gain, but if tariffs are avoided or temporary, the dollar could decline as the USD-positive tariff risk premium is priced out. This nuanced outlook underscores the complex interplay between global trade dynamics and monetary policy in shaping future yield trajectories.