Markets and Economy
The Next Normal: JFG'S 2024 Fixed Income Outlook
3 minute read time
For investors, the defining characteristic of the post-Great Financial Crisis period from 2009 to 2019 was low interest rates—some would say artificially low interest rates. The Federal Reserve kept short-term rates near zero to support the economy during a long period of slow but stable economic growth while inflation remained stubbornly below central banks’ targets. This low growth, low-rate period was dubbed by some the “New Normal.”
The path to policy normalization that began with modest rate hikes from 2017-2019 was famously interrupted by the 2020 Covid pandemic, when central bank action and unprecedented fiscal policy support combined with supply chain disruptions to unleash the highest inflation since the 1980s. The 10-year Treasury yield, which had fallen below 1% during the depths of the crisis, began a rapid ascent as the Fed began the fastest interest-rate hiking cycle since the 1970s. The 10-year peaked at 5% in October of last year, just below the Fed Funds rate, which now sits in a range between 5.25%-5.50%.
We begin 2024 by shifting our focus to the future and navigating the Next Normal, which we believe will look more like the pre-GFC period.
Download a copy of the full report providing our outlook on the economy, markets, and how we’re currently positioning portfolios.
This information is for educational and illustrative purposes only and should not be used or construed as financial advice, an offer to sell, a solicitation, an offer to buy or a recommendation for any security. Opinions expressed herein are as of the date of this report and do not necessarily represent the views of Johnson Financial Group and/or its affiliates. Johnson Financial Group and/or its affiliates may issue reports or have opinions that are inconsistent with this report. Johnson Financial Group and/or its affiliates do not warrant the accuracy or completeness of information contained herein. Such information is subject to change without notice and is not intended to influence your investment decisions. Johnson Financial Group and/or its affiliates do not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your taxes are prepared. Past performance is no guarantee of future results. All performance data, while deemed obtained from reliable sources, are not guaranteed for accuracy. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Certain investments, like real estate, equity investments and fixed income securities, carry a certain degree of risk and may not be suitable for all investors. An investor could lose all or a substantial amount of his or her investment. Johnson Financial Group is the parent company of Johnson Bank and Johnson Wealth Inc. NOT FDIC INSURED * NO BANK GUARANTEE * MAY LOSE VALUE
ABOUT THE AUTHOR