Morgan Stanley Investment Management's Vishal Khanduja, a top-performing fixed-income investor, is scaling back bets against long-term US bonds, saying Treasury Secretary Scott Bessent is prepared to do "whatever it takes" to keep yields from rising. Khanduja, head of the broad markets fixed-income team at the investment manager, said he reduced his exposure to a curve steepener — a bet that the gap between 30- and five-year yields will widen — because he sees less upside in the trade.

The move reflects growing confidence that the Treasury Department will actively manage debt issuance to prevent a sharp backup in long-term rates. Khanduja's shift underscores how policy signals from Washington are reshaping positioning across fixed-income markets.