Quarterly Review

The Fourth Quarter 2024 Investment Review highlights the bond market’s low single-digit gains despite a challenging final quarter. ​ The Bloomberg Aggregate Index lost 3.06% in Q4, ending the year up 1.25%. ​ Duration impacted performance, but CMBS and ABS sectors performed well. ​ Persistent inflation and policy uncertainty were key challenges. ​ Bond yields…

Bond bulls got a long-awaited rally as the market embraced a slowing inflationary backdrop and a softening labor market. Market participants forecasted and received a 50 basis point cut to the Fed Funds Rate while the overall appetite for risk-taking remained solid. The Bloomberg Aggregate Index saw a gain of over 5% as investors enjoyed…

The bond market is showing signs of stabilization as inflation pressures ease, leading to varying performance across different bond categories. Short-term bonds have outperformed longer-term bonds, with 10+ year bonds experiencing losses, reflecting investors’ cautious approach to duration risk. Despite overall stabilization, concerns persist about increasing Treasury bond yields, signaling ongoing inflation worries. The Federal…

Not surprisingly, the Bond Market gave back some of its blistering performance from late last year. Federal Funds rate cut expectations got ahead of reality as inflation remained above the Federal Reserve’s comfort level, thus pushing yields higher over the quarter. The Bloomberg Aggregate Index lost almost 1% in the quarter, led lower by longer…

Risk markets pivoted and rocketed higher on a dovish Fed that strongly hinted at the potential for 75bps of rate cuts in 2024. Optimism reigned supreme as risk and duration were handsomely rewarded. We cannot help but wonder whether it was too far, too fast, but we suspect we will soon learn whether the Fed…

The “higher for longer” theme appears to be sinking in as interest rates moved sharply northward on sticky inflationary readings, a slightly hawkish Federal Reserve (the Fed), and fiscal imbalances. Market participants finally took the Fed at their word, or at least their projections, as the 50bp shift in 2024 and 2025 federal funds rates…

Bonds took a breather during the second quarter, as market participants reassessed their interest rate outlook on mixed economic data and a difficult-to-read Federal Reserve (the Fed). Mixed signals were the key to the equation as inflationary readings slowed, while remaining elevated as the services componentry proved sticky. Market expectations for Fed action started the…

Volatility and uncertainty stemming from the second largest bank failure in U.S. history roiled risk markets in March and spiked interest rate moves in what had been a relatively quiet start to the year. Fortunately, bank regulators put together a safety net that at least stemmed the bleeding in the sector, but the focus would…

As most investors look to put 2022 in the rearview mirror, we note that the fourth quarter ushered in positive performance across most of the fixed income landscape. Market participants are beginning to believe that the Federal Reserve and their central banking counterparts around the world might finally be doing enough to counter inflation. Read…

Bond yields continued their march higher as the Federal Reserve has been unrelenting in raising their target rate in their stance on wanting to curb inflation. Unfortunately, they are yet to be successful and many bond investors are choosing the sidelines versus the frontlines as monetary losses mount. The Bloomberg Aggregate Index was down about…