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Fed Minutes Reveal Uncertainty on Rates; Barkin Cautious About Soft Landing By James Christie Good day. Minutes of the Federal Reserve's Dec. 12-13 meeting released Wednesday revealed some...
"It's going to clip your coupon, you're not going to have a lot of defaults, and your returns may even be better than the equity markets."
Rising faith in a central bank dovishness has driven a nearly 10% gain in global bonds since early November, Bloomberg reported.
While the odds of avoiding an economic recession have increased with the Fed pivot, history provides no strong guidance around the eventual success. Entering 2024, one should be prepared for possible turbulence as the Fed attempts a smooth landing.
Defaults next year will rise to a rate of 3.5%-4.0% for leveraged loans, and 5.0%-5.5% for high-yield bonds, Fitch Ratings says.