Annual report 2024

Bond markets feel the heat The story dominating September and early-October’s headlines has been one of the sharpest sell-offs in government bond markets for years, pushing borrowing costs to levels not seen in decades. In the US, the 10-year Treasury yield rose by more than half a percentage point over the month, with the 30-year reaching its highest level since before the financial crisis.

The story of the third quarter depends on where you look. Equity investors finished it within touching distance of record highs. Bond investors finished it nursing some of their heaviest losses in years.

In this episode of Wisdom Shared, Charlie Parker, and Head of Research at WisdomTree in Europe, Pierre Debru, explore the rise of exchange-traded funds (ETFs), and why they matter for financial advisers.

The Federal Reserve raised rates by 25bp to 3.75–4.00% on 16 September, in a unanimous decision and the first increase since 2023. Its projections have prompted markets to reassess the outlook: twelve of eighteen participants expect one further increase this year, while four expect two and the remaining two expect no further rise. The Committee does not project inflation returning to target until 2029.

The two big stories of the week have been AI and the less eye catching but perhaps more impactful move in bond yields.