Year-ahead outlook season is upon us again and the déjà vu vibe is strong. This time last year, investors and analysts were busy telling the world about their key convictions about 2023. Chief among them: the US was heading for a recession and the historic decline in government bond prices was over.
Now, you’ll be shocked to hear the key message for 2024 is that (sure, we got it wrong last time, but hear us out): the US is heading for recession and the historic decline in government bond prices is over.
The main tweak to the refrain is that in general the elusive recession is expected to be on the mild side — a slowdown rather than the so-called “hard landing,” the horror show that was widely expected at the start of this year. But most agree that next year will be the point when higher interest rates finally start to bite, boosting the allure of safe assets such as government debt. They really mean it this time.