Economy Gets Healthier as Company Bond Yields Fall

For all the concern about another recession, the outlook for America’s economy is looking brighter in the bond market, where investors are accepting the lowest yields since 2004 to lend companies money.

Lenders typically require higher interest rates when the economy cools and default risks rise. Instead, yields over Treasuries on corporate debt have shrunk as much as 0.38 percentage point on average to 2.9 percentage points from the high this year in June, according to Bank of America Merrill Lynch index data. Debt sales totaled $90.1 billion last month, the busiest July on record, Bloomberg data show.