8 Bond Market Predictions for 2023

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Investors rarely experience a year like 2022, with sizable losses on both sides of the traditional 60/40 portfolio of stocks and bonds.

According to Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research, there are only two or three years on record that closely resemble 2022 going all the way back to the Great Depression.

“This year has been unique, and it has been brutal,” Jones tells ThinkAdvisor. “There is no escaping that basic fact. Equity and fixed income investors have experienced a lot of pain this year.”

Fortunately, Jones says, the prospects for 2023 appear much brighter. While Jones cautions that anything is possible with respect to the markets and the economy, she says it is at least statistically quite unlikely that investors will see a repeat of this year’s pain in 2023.

In fact, according to Jones’ newly published (and highly detailed) 2023 bond market outlook, there is good reason for optimism.

“It has been a long time coming,” she says, “but 2023 looks to be the year that bonds will be back in fashion with investors. After years of low yields followed by a brutal drop in prices during 2022, returns in the fixed income markets appear poised to rebound.”

See the slideshow for highlights of Jones’ latest discussion with ThinkAdvisor, spotlighting eight predictions for bond market investors.

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