Fixed Income Investment Strategy — October 2023
October 10, 2023 — Fixed Income Investment Strategy provides an overview of Sage’s market outlook and sector positioning.
- In September, the FOMC held rates steady but adjusted the “dot plots” to include two less cuts in 2024. This accelerated an aggressive re-pricing of yields on the long-end of the curve, with 10yr yields moving 73 bps higher and 2yr yields only 15 bps. The result was a -3.2% return for the broad market during 3Q, pushing YTD returns negative.
- We believe rates will be capped by economic weakness into year-end and during 2024. We expect a mild recession in 1H24 as consumer strength is worn down by high rates, high prices in areas that matter to consumers (food and energy), and further erosion of excess savings.
- For fixed income investors, giving back much of the year’s gains was painful, but it skews future returns even more to the positive side given higher yields; and curve steepening makes the duration extension an easier decision.
Anatomy of a Selloff
October 9, 2023 -- In this Notes from the Desk, we look at how the change in financial conditions since the end of July has affected bond yields and what it means . . .
Fixed Income, Municipal Fixed Income, Tactical ETF
Sage Advice Quarterly Market Review 3Q23
October 3, 2023 -- Third quarter returns were characterized by three major trends – rising long-end yields, a significant move higher in oil, and an equity correction into . . .
As Fed Tightening Risks Wane, Other Risks Emerge — Fixed Income Outlook in 5 Charts
September 14, 2023 -- A resilient labor market and slowing inflation suggests that the FOMC is done hiking rates. While the growth and inflation picture looks like a soft . . .