Morgan Stanley strategists have advised maintaining a neutral position on U.S. Treasuries until the economic impact of the Middle East conflict and its influence on the Federal Reserve's interest rate path become clearer. According to Jin10, the strategists expressed a preference for a neutral stance on U.S. Treasuries until there is a better understanding of how the Iran conflict might affect Federal Reserve policy and, importantly, fiscal policy. They also noted that speculation about additional fiscal stimulus could explain why U.S. Treasuries have not responded to risk aversion as expected. The strategists added that the absence of a dovish Federal Reserve does not favor using U.S. Treasuries to hedge against higher-risk assets.