The U.S. economy is still likely headed toward a downturn, but investors have options to buy relatively safe fixed income assets that will deliver high yields, according to a top bond expert at one of the country’s biggest asset managers. Sara Devereux, the global head of fixed income at Vanguard’s Investment Management Group, told CNBC’s Bob Pisani in an interview Friday that the U.S. is still likely to fall into a recession in 2024. “Our view is that we’re going to have a recession in the back half of next year, and the Fed is at or near the end of the hiking cycle,” she said. Entering 2023, many investment experts and economists predicted the U.S. was heading toward a recession, but so far growth has been surprisingly strong. The Commerce Department said Thursday that gross domestic product grew at a 4.9% annual pace in the third quarter . Devereux said that the impact of the Federal Reserve’s rate hikes has yet to be fully felt on the economy. Vanguard is perhaps best known as a leader in low-cost passive index investing in both mutual funds and exchange-traded funds. The firm does have active products, however, such as the Vanguard Core Bond Fund (VCORX) . In those funds, Vanguard’s team has tilted the holdings upward in quality, Dereveux said. That means increasing exposure to assets like Treasurys, agency mortgage-backed securities and investment grade corporate credit. On the other hand, Vanguard has deemphasized commercial real estate, high yield corporate debt and issuers that rely heavily on bank loans, she said. Devereux also called municipal bonds “very high quality” and said they were especially useful for investors looking to lower their tax bills . On Friday, Vanguard announced it was launching two new municipal bond index ETFs — Vanguard Intermediate-Term Tax-Exempt Bond ETF (VTEI) and Vanguard California Tax-Exempt Bond ETF (VTEC). Even as the economy starts to slow, Devereux said Vanguard expects a “hawkish hold” from the Fed on interest rates. “They’re not going to cut them at the first sign of stress,” she said. But that doesn’t mean investors should continue to wait to buy bonds, because the high coupon rates mean that yields would have to continue rising sharply in order to create losses for bondholders, Devereux said. “For people who are a little worried about jumping in now — when do I get in, when do I not — you have a lot of cushion,” she said. Watch CNBC Pro’s full interview with Devereux above.