Financial markets always retain the power to surprise, but the path ahead feels uniquely unpredictable, writes Darius McDermott
The ebb and flow of interest rate expectations have dominated financial markets over the past 12 months. While inflation has started to drop, markets are likely to be similarly preoccupied by the direction of central banks in 2024. The most important question will probably be whether they cut rates or not as their economies deteriorate. It seems likely to be a good environment for fixed income. Yields have moved marginally lower, but remain at decade-long highs and the risk/reward balance appears to have tipped discernibly in investors' favour. Even if inflation does rear its head again...
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