FICC Focus The Year Ahead in Rates, Credit and Currencies
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Dec 9, 2024 Celebrate the approaching year with insights on interest rates, credit, and currency trends! Unravel unexpected market surprises from the past year and explore future shifts in the bond landscape. Dive into the dynamics of foreign exchange markets amidst economic resilience and volatility. Learn about the implications of the Supreme Court's Purdue ruling on bankruptcy and catch an outlook on Europe's tumultuous financial climate. Plus, discover how new housing policies may impact first-time buyers and the future of mortgage markets.
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Inaccurate Forecasts
- Most economic and market forecasts were wrong in 2024, expecting a recession and significant Fed rate cuts.
- The market bounced around, pricing in cuts similar to now, but with a deep recession expectation.
Memorable Predictions & Statements
- Lara Rehm (FS Investments) correctly predicted a mild slowdown and market concern over deficits in July.
- Steve Major (HSBC) memorably stated, "bonds are not vegetables," highlighting market sentiment.
Yield Curve Dynamics
- Long-end bond yields (10-year, 30-year) are unlikely to break out of their recent range.
- Yield curve changes will likely come from 2-year Treasury yields, influenced by economic slowdown and inflation.