The third quarter of 2024 marked a reversal from the first half of the year, as longer-duration and higher-rated sectors outperformed shorter-duration and lower-rated cohorts, driven primarily by falling U.S. Treasury rates. The long-anticipated start of the interest-rate cutting cycle by the Federal Reserve in September contributed to lower Treasury rates across tenors in the quarter, as the two- and 10-year yields declined 111 basis points (bps) and 62 bps, respectively. Securitized and corporate credit spreads broadly tightened, and credit curves flattened.
