Although the fourth quarter of 2024 was undoubtedly a mediocre one for bonds, the ongoing bull market demonstrates that elevated yields will likely continue generating attractive returns over the long run. And as 2025 commences, the backdrop warrants “buy-the-dip (in prices)” and carry-oriented approaches.

Our Q1 2025 Outlook starts with a reminder about the prevailing fixed income backdrop. Since 2022, the story is one of bonds posting respectable returns owing to two key factors that remain in place: moderate economic growth that enables additional central bank rate cuts and investor demand to lock in attractive, long-term income streams. Robert Tipp, CFA, Chief Investment Strategist and Head of Global Bonds, explains further in “Hold On; Ride the Bull.”

While additional central bank rate cuts support our base case for moderate global economic growth, this outcome is not immune to additional bouts of market upheaval, likely aggravated by heightened global competition. In “To Each its Own,” Our Global Macroeconomic Research Team looks at the measures major economies are pursuing in the name of faster, more competitive economic growth.

We follow with an assessment of the factors that are underpinning healthy corporate credit fundamentals, our portfolio managers’ sector outlooks, and an example of a certain problem with climate risk analysis.