Chart in a Minute

Use these simple visuals to help illustrate technical market perspectives to clients.

A bright future for bonds, even after a late 2023 rally?

2/22/2024

We think the outlook for fixed income remains quite favorable, even after an impressive rally late last year.

Bar chart comparing Yield to Worse of various investments

Key takeaways:

  • Inflation continued trending lower in 2023, leading the Federal Reserve (Fed) to a late-year pivot on interest rates and forecast for three cuts in 2024. Bonds rallied in response, sending yields lower.
  • As a result, yields are below what may have been this cycle’s highs, but they remain attractive. The chart above shows recent yields compared with just before the Fed’s recent rate-hike cycle began.
  • In this environment, it’s worth remembering that coupon payments tend to drive bond returns over the long term. And with this in mind, we think the outlook for bonds remains quite bright.

More Charts in a Minute

Chart in a Minute

If U.S. growth continues to slow in 2024 and interest rates fall as forecasted, international equities may be poised to benefit. Read more in this client-friendly chart.
Chart in a Minute

This chart can potentially help clients understand why buying a longer-term bond with a similar yield to a shorter-term bond might make more sense now than potentially waiting and facing reinvestment risk down the road.
Chart in a Minute

Interest rates are forecasted to fall in 2024, which might lead to lower yields across the bond maturity curve. This client-approved chart can be used to help investors understand the potential for capturing more capital gains down the road.