Bond market liquidity may be down, but demand is up.
Morningstar reported today (Morningstar Manager Research, U.S. Asset Flows Update. Nov 13, 2015. Based on data through 10/31/15) that net fund flows (active and passive combined) into fixed income funds totaled $19.65 billion in October, for a 1 year total of $82.07 billion.
Apparently, there are many investors not waiting on the Fed to allocate to fixed income. (Trying to time rates to buy and sell at the “optimal”time is impossible.) Advisors and investors should be looking at fixed income based on the portfolio goals–and apparently many are.