Wall Street Firms Predict 'Roar Back' Year for Bonds in 2024, But Government Debt Looms as Potential Headwind
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Some Wall Street firms like AllianceBernstein and Bank of America are very optimistic about bonds in 2024, predicting a "roar back" and bonds being the best performing asset.
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The optimism stems from expectations of the Fed stopping interest rate hikes soon and potentially lowering rates later in 2024.
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This could lead to high bond returns, with some predictions of 10-15% returns that would be the best year since 1995.
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However, huge new government bond issuance to finance deficits could be a headwind holding bond prices down.
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Investors should build diversified portfolios, potentially including bond ETFs like the Vanguard Total Bond Market fund, rather than betting all-in on a bond rally.