Fed Muffling Taper Talk Spurs High-Grade Revival: Credit Markets

Investment-grade corporate bonds are showing signs of life following the biggest losses since 2008 as concern wanes that a Federal Reserve pullback from record stimulus will cause a surge in interest rates.

Mutual and exchange-traded funds that focus on dollar-denominated, high-grade notes reported $639 million of deposits in the week ended Aug. 7, the most in more than two months, according to Bank of America Corp. Relative yields on the debt have retraced more than half of an increase that pushed them to a nine-month high in June after Fed Chairman Ben S. Bernanke laid out a timeline for the Fed to begin slowing bond purchases that have bolstered credit markets.