Bonds are flashing a ‘smile’ after historically bad stretch, a promising sign for 2024

No really, 2024 is looking like the “year of the bond.”

That’s because a “smile,” or positive convexity, has been taking shape across the roughly $55 trillion U.S. debt market after a brutal three years in bonds. It reflects growing optimism around the end of the Federal Reserve’s interest-rate hikes, and an eventual pivot to rate cuts.

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