PGIM Investments: Bonds benefit from four-decade discounts and elevated yields

The strong interest-rate rally from 2023 paused in the first half of 2024, with yields remaining in rarified air. While some major central banks initiated rate cuts, the U.S. Federal Reserve (the Fed) was a key outlier by holding rates steady. Markets cheered when the Fed signalled its next move will likely be a cut, although timing remains uncertain. Against this backdrop, we maintain a bullish outlook for fixed income assets and think it’s a compelling entry point.

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