Fearing the Fed, Credit Investors Are Buying More Junk Instead
- Riskier high-yield debt, leveraged loans are positive for year
- Rising rates are a more pressing concern to money managers now
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U.S. company-debt investors fear the Fed more than they fear defaults.
That’s what U.S. bond and loan markets are signaling now. Safer types of debt, like Treasuries and investment-grade corporate bonds, have dropped this year. But the riskiest high-yield bonds -- rated in the CCC range-- gained 0.9 percent through Wednesday. And loans to junk-rated companies have risen even more, decoupling from bond prices that they are usually tightly correlated with.