Bond market rally drives yields past Wall Street's end-2024 targets

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A global rally in government debt has already driven yields past many Wall Street targets for the end of 2024, highlighting how recent market moves have taken analysts by surprise.

Article originally published by The Financial Times. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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21 Dec 2023

When banks began sending out their annual forecasts to clients a month ago, they were broadly united in the view that government bonds would rally next year as interest rates start to fall.

But many forecasts have already been met more than a year early, as bigger than expected falls in inflation and a changed outlook from the US Federal Reserve have persuaded investors to bring forward their bets on rate cuts.

Yields on benchmark 10-year US Treasuries have declined by almost a percentage point since the end of October on rising expectations that the Fed will begin cutting rates as soon as March. Yields move inversely to prices.

“It’s been a very quick move in rates, because the Fed has made a very quick pivot,” said Bank of America rates strategist Meghan Swiber. “It just speaks to how volatile the market has been — and how very conditional it is on our