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Interest rate cycles and fixed income markets

A few more hurdles to clear

AS WE approach the second anniversary of the first interest rate hike by the South African Reserve Bank, we outline recent developments that suggest we could be at the top of the interest rate cycle.

It has been a tumultuous 24 months for fixed income, and South African fixed income certainly did not escape the broader bear market.

Driving this was a combination of stubbornly rising inflation, aggressive monetary policy tightening, and souring sentiment among investors—all coupled with some homegrown challenges.

The year began on a positive note, as China finally reopened from its COVID-19 lockdown and US inflation appeared to be slowing.

However, market sentiment subsequently soured as a combination of …

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