12.20.22 Core Bonds Tend to do Well During Fed Pauses
Many financial markets are on pace for their worst year in quite some time, or in the case of core bonds, the worst year since inception of the Bloomberg Aggregate Bond Index, which is the main core bond index. With inflationary pressures running much hotter than central bank targets, many central banks were forced to respond by raising policy rates at a speed and magnitude unlike any other year, which was a decided headwind to many financial assets this year.
As mentioned in this week’s Weekly Market Commentary (found here), the Fed’s 0.50% rate hike last week capped a year in which the Federal Reserve (Fed) raised s
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