From Quiver Quantitative Solutions:

Major financial institutions, including JPMorgan and Morgan Stanley, are predicting that U.S. investment-grade bonds will outperform junk debt in 2024 due to interest rate cuts and economic slowdown. Bank of America also favours higher-rated bonds. Investment-grade bonds are more affected by interest rate changes and are expected to benefit from anticipated Federal Reserve rate cuts. Morgan Stanley recommends shorter-dated bonds for potential upside. IG bonds saw a historic rally in 2023 and could see mid to high-single digit gains in 2024, though BlackRock and Mitsubishi UFJ advise caution. Overall, it is a pivotal year for credit markets, hinging on economic forecasts and Fed decisions.



Read more: Wall Street’s 2024 Credit Forecast