Fixed income in H1: 'Year of the bond' looks more like 'year of the coupon'

Muted returns but yields remain attractive

Stubbornly high inflation has dampened the meaningful fixed income returns many expected, but hopes are still pinned for a sustained shift in economic data that will push markets out of their current ranges.

In 2022, bond markets saw one of their biggest declines on record as persistently high inflation and a wave of interest rate increases drove government bond rates to reach their highest levels in more than a decade.  Hugh Gimber, global market strategist at JP Morgan Asset Management, said last year's sell-off in fixed income was a "historical" repricing. He noted that not only was it the worst year on record for global bonds, but it was "more than three times as bad" as the previous worst year. The Bloomberg Global Aggregate bond index fell 16% over 2022, while the S&P US Aggregate B...