(Bloomberg) -- Price swings in fixed-income markets that sent implied volatility to the highest since 2008 are finally subsiding as the global interest-rate easing cycle kicks in, according to Goldman Sachs Group Inc.

Historical data suggest the bond market is likely to become less prone to swings caused by economic-data surprises in the next 12 to 24 months, “once rate cuts begin and policy rates move closer to their longer-run levels,” strategists including Joseph Briggs wrote in a note. The inflation trajectory should also dampen reactions, they said.

The US market is already beginning to reflect Goldman’s view. After a spike early last year, the ICE BofA MOVE Index of Treasury-option volatility has returned to roughly the levels seen before the Federal Reserve started hiking rates in 2022.

Even so, given that interest rates now are typically higher than they were in the years prior to the pandemic, “market sensitivity to data surprises will more likely return to its pre-Global Financial Crisis average rather than the low levels observed last cycle,” the strategists said.

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