One of the year's big surprises will be that junk bonds will "actually have decent returns," Goldman Sachs bond specialist Jonathan Beinner said Wednesday.
Last year, the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), a reflection of the junk bond market, lost 11.6 percent, compared with the fractional drop for the S&P 500 in 2015. But so far this year, the reverse has been true, with the HYG off almost 1.4 percent as of Tuesday's close to the S&P's more than 5 percent decline.
Beinner, chief investment officer at Goldman Sachs Asset Management, told CNBC's "Squawk Box" he does see the high-yield default climbing to a range of 5 to 5.5 percent this year, versus about 3.2 percent in 2015.
"About two-thirds of that is expected to come from the energy sector," he said. "There's clearly lots of risk in that sector. But there's 85 percent of the high-yield market that isn't exposed to commodities, and is actually priced around an 8 percent yield."
The default rates outside energy are expected to hold steady at around 2 percent this year, predicted Beinner, also his firm's co-head of Global Fixed Income and Liquidity Management. The firm oversees and advises on more than $1 trillion.
Concerns over the slowdown in China's economy and the sharp drop in oil prices will also continue to be major themes for investors this year, Beinner said. "[But] we do think the U.S. economy can withstand these shocks," leading to the Federal Reserve to continue to increase interest rates this year, he added. The Fed hiked rates in December for the first time in more than nine years.
"I think they really do believe they'll do four moves this year. That's probably a reasonably good outcome, and a relatively high probability," Beinner said. But he acknowledged central bankers would need be "mostly right" on their economic forecasts for above-trend growth and continued improvements in the job market. "[But] inflation is not going to hit the target this year," he said, referring to the Fed's desire to see price pressures increase to 2 percent.
As for the dollar, Beinner does not see another big leg up this year, even with the predicted rate hikes. "The U.S. economy is actually a relatively closed economy. But when you have the trade-weighted dollar going up 25 percent that has real economic impact. And if it wasn't for that, we'd already be a much higher interest rates," he said.