From Investing.com: 2024-08-27 02:07:00

The bond market has been at odds with the Fed since interest rates hit 5% in March 2023, with investors predicting a recession and pushing for lower rates. Despite the Fed’s focus on data, the market has consistently expected rates to fall faster than reality. The market’s negative outlook is driven by a one-sided focus on capital cost, ignoring return. Data suggests a shift in Fed views on long-term rates, potentially impacting the yield curve. As the economy enters a late credit cycle, U.S. asset allocators may find better returns in the UK. Bond market mispricing could lead to volatility as investors adjust expectations.



Read more at Investing.com: The Bond Market’s Ongoing Battle With the Federal Reserve