A favorite Mark Twain aphorism states, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Bond markets began 2024 with certainty that a return to 2% inflation would allow the US Federal Reserve (“Fed”) to cut interest rates in March and at every Federal Open Market Committee (“FOMC”) meeting that followed. But what bond markets knew for sure turned out to not be so—leading to “trouble” (or disappointment) in the form of negative 1.50% returns to start the year. Now, market pricing is more closely aligned with the Fed’s rate cut projections for 2024, creating a ... (full story)