Morgan Stanley says the U.S. yield curve may steepen again.

Morgan Stanley said that, given the possibility of weak US employment data, it could prompt the Federal Reserve to hold off until March, and the US Treasury yield curve could steepen again. Strategists such as Matthew Hornbach wrote in a report that the decline in labor force participation "has led to a decrease in the unemployment rate, but our economists believe that this decline is just a temporary fluctuation and is likely to reverse next month." The labor discrepancy data from the World Business Federation shows that consumers perceive the unemployment rate to be 4.9%, not 4.2%, the largest gap since 2010. "Consumer confidence in the job market further deteriorating could surprise investors who are more optimistic about the outlook for the labor market."