Morgan Stanley strategists predict that if Donald Trump wins the presidential election, it would likely result in lower short-term interest rates and higher long-term rates, leading to a steepening yield curve. The presence of new immigrants and higher tariffs under Trump's policies could negatively impact the economy and push long-term rates higher. The Federal Reserve is expected to start cutting rates this year, with interest-rate futures indicating a 63% chance of at least one rate cut by September and a 61% chance of at least two rate cuts by year-end. The effects of rate fluctuations on consumers are mixed, with higher rates benefiting bank accounts and lower rates benefiting loans. Edmond de Rothschild Asset Management's Chief Investment Officer Benjamin Melman also predicts that a win for Donald Trump in the U.S. presidential election in November would lead to a spike in long-term U.S. Treasury yields. Melman believes that Trump's approach on taxes and immigration would put pressure on the U.S. labor market and wider economy, leading to inflation. The market has already shown expectations for a Trump win, with ten-year U.S. Treasury yields rising to more than three-week highs after the June 27 debate between Trump and President Joe Biden. Edmond de Rothschild has grown more cautious about European assets and holds bond market positions that include carry strategies profiting from rate differentials between asset values and corporate and financial hybrid debt. [92dc8dce] [094c0fac] [cf27eca2]