2023 was supposed to be the “year of the bond.”

The thesis behind that mantra was about as simple as investment rationales get: Last year was really (really) bad, and the year before that wasn’t great either, so this year was likely to be better.

Notwithstanding the old adage about bad things “coming in threes,” 10-year US government bonds or their equivalent have never had three down years in a row in the (short) history of the republic.

Ostensibly anyway, the odds favored a rebound. And they probably still do.

Like credit and equities, bonds got off to a good start in 2023. But also like credit and equities, they succumbed to a run of hot US economic data and, more specifically, the read-through of that data for Fed policy.

The wave of hawkish repricing across the US rates complex was self-evidently bad for Treasurys in February. The popular long-end ETF fell 5%, for example, and a product tracking returns on one- to three-year US debt had its worst month since September.

Despite the renewed tumult, investors are buying bonds — or at least those of advanced economies. Indeed, last week saw a ninth straight inflow, according to EPFR’s figures. The net $8.4 billion haul was entirely attributable to a $10.2 billion inflow for DM bonds, out of which $7.4 billion went to the US.

The figure above gives you some context. Note the large week-to-week increase in inflows to US bonds. Plainly, investors were buying the dip (i.e., buying higher yields).

So far in 2023, Treasury inflows sum to almost $30 billion including last week’s haul. In at least one sense, then, 2023 is indeed living up to the “year of the bond” narrative.

As BofA’s Michael Hartnett noted, the inflows so far mark the “strongest start to [a] year for Treasurys since 2004.”