Last year, global bond markets toggled between persistent inflation and recession in an aggressive rates-tightening era. Will the 2024 playbook be the same?
If there was one asset class that gave global central bankers and investors a varying sense of caution and exuberance in 2023, it was bonds. Navigating through the fears of widening inflation and interest rate tightening cycle, the 10-year bond yields in the US spiked to multiple-year highs while investors rushed to the safety of fixed income. The playbook of bond markets in 2024 is expected to stay the same, at least in the first half, as the scenario has changed just a little. The era of aggressive rate cycle may have ended or is ending soon, but inflation remains sticky.