---
title: "Morgan Stanley warns inflation may blunt bonds' safety role"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/287438638.md"
description: "Morgan Stanley warns that high inflation may undermine bonds' traditional safety role, as it increases the correlation between stocks and bonds. The 30-year U.S. Treasury yield has surpassed 5.2%, raising borrowing costs and impacting sectors dependent on low capital costs. Additionally, elevated rates pose risks to highly leveraged small-cap firms, potentially leading to financial distress."
datetime: "2026-05-23T18:37:18.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/287438638.md)
  - [en](https://longbridge.com/en/news/287438638.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/287438638.md)
---

# Morgan Stanley warns inflation may blunt bonds' safety role

Bonds' safety questioned: High inflation historically increases stock-bond correlation, reducing bonds' ability to offset equity declines. Yields hit highs: The 30-year U.S. Treasury yield has topped 5.2%, lifting borrowing costs and pressuring sectors reliant on cheap capital. Small-cap risk: Elevated rates threaten highly leveraged small-cap firms, raising the risk of financial distress and market drag.

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