Historic Shifts in the U.S. Treasury Market: From Losses to Credibility

The 10-year Treasury bond is set to experience its third consecutive year of losses in 2023, marking a historic event that has never occurred in 250 years of U.S. history. Bank of America strategists attribute this to a 40% surge in U.S. nominal GDP growth since the COVID-19 lows of 2020. Bond returns have been negatively impacted by the Federal Reserve's interest rate hikes aimed at controlling inflation. While the stock market has performed better this year, the rally has been concentrated in U.S. stocks, particularly in the technology sector, with global market breadth at its lowest since 2003.