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Year-to-date returns for US fixed income are skewing positive this year ahead of the Federal Reserve policy announcement this afternoon. Although the central bank is expected to leave rates unchanged today, markets are pricing in a September cut and much of the US fixed-income market is all-in on anticipating that outcome.
Using a set of ETFs to profile the various segments of bonds shows that 12 of 15 sectors are higher on the year through yesterday’s close (July 30). The three exceptions: long-term bonds, which remain moderately underwater for the year, although it’s worth pointing out that the red ink has faded substantially vs. earlier in 2024.
The top performer so far in 2024: US junk bonds (JNK) with a 4.2% advance. That’s sharply above the rise in US investment-grade benchmark (BND), which is ahead by 1.2% this year.
US Treasuries are a key part of the recent strength for bonds overall….
