2020 could be the year that the almost four-decade bull market in U.S. bonds ends or at least takes a breather from this year's mostly double-digit returns. The economy is growing, albeit moderately, and the Federal Reserve, as result, is not expected to cut interest rates, so long as there are no surprises on the downside. Most important, fears of recession have declined substantially.

If the U.S. economy grows at an annual inflation-adjusted rate just under 2% and inflation remains subdued, at or below the Federal Reserve's 2% target — both included in the general consensus among economists — odds are Fed monetary policy will remain on hold and interest rates won't stray far from current levels.

But if the economy gains strength and reinflates — a number of strategists continue to mention that possibility — then rates could range higher, reaching 2.25% to 2.50% by year-end, which would hurt the performance of bonds overall. Goldman Sachs strategists, who are forecasting 2.25% yield in the 10-year Treasury for 2020, say investors should expect a "baby bear" market in bonds next year.