A rebound in distressed government bonds in distressed countries, including Ethiopia, Lebanon, and Zambia, is helping emerging-market USD debt to its best start since 2019. The rally is partly due to prices recovering from rock-bottom levels last year when traders were overly pessimistic about recovery expectations. However, it is also a reflection of how investors provided towards riskier investments this year. The bullish outlook runs contrary to some recent calls by several agencies, including Citigroup, advising investors to cut their exposure until there is clarity on how high the Fed will raise rates.