What do you think the bond market could do if the fed cuts rates to 0.25% next year?

Perhaps the bond market will price in recession fears and accompanying QE in ensuing months so much that it will be seamless a rise in bond prices. Suppose rates are cut dramatic amounts, 0.50% cut at a time. Current FFR is 1.75%. So, 3 major cuts at 0.50% each. This is all hypothetical. Reason I ask is that the NAV of my bond fund has suffered a lot since last year. A recession and QE would be another problem but wondering how much bond prices would possibly react. Let’s assume that federal fund rates between now and next year do not budge.

Bond futures indicate final hike could be Q1 23, to 3.5% then cuts. Whoopee, buy bonds at that point and hold them to maturity. I’m thinking of loading up on 2 year bonds in early 2023 then kicking the can forward until retirement in 2025… Then figure out how to deploy. The current market environment is just nuts.

Commodities are getting hit hard, oil, copper, nickel. Challenger Gray unemployment ticking up. Atlanta Fed has negative real-time GDP indicator. The five year breakeven inflation rate is still quite low. I don’t see this inflation lasting forever… the Fed may hike and cause a recession (if we are not in one already) then suddenly reverse course and lower interest rates.

@AustinBonds… The answer to your question is in this book:

So true for bonds. You have to be nimble and know what you want