Global fixed income outlook 2025: Setting the pace

While rates may have peaked in many – but not all – developed bond markets, the potential for healthy fixed income returns is available across sectors. Global fixed income markets will likely take their lead from the U.S. in 2025, with a stronger U.S. economy and uncertainty surrounding the incoming administration’s policies setting the tone.

Fears of a U.S. recession, which dominated attention in early 2024, have receded materially. We expect a soft landing in 2025, likely characterized by slower real growth, moderating inflation and additional U.S. Federal Reserve rate cuts. That said, the fiscal and regulatory aspects of the economy under a Trump administration present new uncertainty for economies and financial markets globally.

Nuveen’s 2025 global fixed income outlook examines the macroeconomic factors at play going into the new year, and how these will affect the fixed income landscape for the following sectors:

• Investment grade credit
• High yield corporates
• Emerging markets debt
• Non-U.S. developed markets
• Taxable municipal bonds
• Tax-exempt municipal bonds
• Broadly syndicated loans (BSL) and collateralized loan obligations (CLOs)
• Securitized credit
• Preferred securities
• Impact bonds
• Multi-sector