Investing in bonds didn’t pay off in 2022, but three factors may combine to change that this year

Even though equity markets declined by double digits last year—more than 20% in some cases—the bond market didn’t provide a bastion of safety.

In fact, the S&P U.S. Aggregate Bond Index was down more than 11.5% at the end of the year. From U.S. treasuries to investment grade to high yield, it was a bad time through and through.

But the disappointment of 2022—spurred by multi-decade highs in inflation and the most aggressive central bank rate hike cycles since the 1970s—may be a relic of the past.

The groundwork is laid for 2023 to be a better year for bonds, especially for U.S. treasuries, including two-year (/ZT), 10-year...

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