What should investors know about the bond market in 2024?

Here’s what investors should understand about the outlook for the bond market and what to watch as the year unfolds. At the beginning of 2024, bond yields, the rate of return they generate for investors, were near post-financial crisis highs 1 —and for fixed-income, yields have historically served as a good proxy for future returns.

What does the Fed know about the bond market?

What the Fed (and bond market) knows for certain: The bond market outlook has improved as expected rate cuts align more closely with the Fed. But these expectations reflect the view that policy is restrictive, which remains challenged by strong economic data.

How has the bond market changed over the past year?

For illustrative purposes only. The action in the bond market has been anything but plain-vanilla over the past year. Ten-year Treasury yields have spanned a huge range—from as low as 3.25% in April in the wake of the banking crisis to as high as 5.02% in October on surprisingly strong third-quarter economic growth.