November is proving to be an exceptional month for the bond market, with impressive gains that haven’t been seen in nearly 40 years. The surge is driven by renewed hopes for rate cuts by the Federal Reserve in 2024.
The Bloomberg US Aggregate Bond Index, a widely recognized fixed-income benchmark, has recorded a remarkable increase of 4.91% as of the close of Wednesday. This positions it to achieve the largest monthly gain since May 1985, when the return reached an impressive 5.23%. The index, which is currently up 2% year-to-date, consists of Treasurys, corporate bonds, agency securities, and non-agency securities.
Lawrence Gillum, a strategist for broker-dealer LPL Financial based in Charlotte, North Carolina, states, “It’s a much-needed relief for fixed-income investors who have endured six consecutive months of negative returns.” He adds, “Last month saw heightened expectations for rate cuts, and now that those expectations are factored into the market, we anticipate a more stable trading environment.”
With the bond market experiencing such a positive performance, investors can take heart in the current outlook for their fixed-income investments.
