Total returns for the Bloomberg US aggregate index were 4.5% in November, the best month since May 1985, and 5% for the Bloomberg global aggregate index, the strongest month since December 2008.
But despite this strong run, our view is that bonds can rally further next year:
We expect bond yields to fall in 2024, supporting returns for the asset class. Following solid US economic performance during the summer, recent data show that the tightness in the labor market is beginning to ease and inflation is continuing to recede. In 2024, we see growth and inflation continuing to slow as excess savings are run down further. Although inflation will likely remain above the Federal Reserve’s 2% target through most, or all, of the year ahead, we believe policymakers will be sufficiently confident by mid year that inflation is falling sustainably toward target to begin cutting rates. Our year-end 2024 forecast for the 10-year US Treasury yield…
