The past year was a challenging one for public sector institutions. 

Reserve managers started 2023 wary that major economies might tip into recession. As a result, most had trimmed duration in their fixed income portfolios, snapped up new short-term, developed-economy debt, and put some of their diversification efforts – particularly into emerging market fixed income and equities – on hold. Sovereign debt issuers, meanwhile, faced higher funding costs and a possible drying up of market liquidity