The firms, which are among the 23 primary dealers that trade with the Fed, are at odds as investors decipher the central bank’s views on the economy in its statement this week. Morgan Stanley called the comment “slightly dovish.” Goldman forecasts rate increases in June, September and December. U.S. consumer spending rose less than forecast in March, Commerce Department figures showed Friday, after data Thursday showed the economy growing at its slowest pace in two years.

Looking for Growth
Central bankers used their statement to indicate growing confidence in the world economy while suggesting they’re still looking for the signs of growth, inflation and global stability to justify a move.

Eoin Treacy's view

This divergence between the opinions of Goldman Sachs and Morgan Stanley with regard to Treasuries has been an open bone of contention for months. There is a lot at stake not least since the bond market has been in a secular bull market for 35 years and has been supported in spectacular fashion by the extraordinary measures employed by central banks to avoid a depression. 

The Merrill Lynch 10yr+ Total Return Index is still trending higher in a reasonably consistent manner not least as Treasuries take on attractive safe haven characteristics during times of stock market stress.