After So Many False Dawns, the Market Is Convinced the Fed Will Finally Cut

Few saw the bond market’s about-face coming. Month after month, prices did little but fall as the economy remained surprisingly resistant to the Federal Reserve’s rate-hike onslaught. By late October, 10-year Treasury yields had pushed above 5% for the first time since 2007 and US government debt was on pace for its third straight annual loss. Analysts at Bank of America Corp. said it was shaping up to be the worst rout in the nation’s history.

Then investors finally got the signals they’d been waiting for.