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Corporate Bonds Are on Fire After the Fed’s Dovish Signal

  • Investment-grade bond sales are six times oversubscribed
  • Easy money’s already been made, Morgan Stanley strategist says
The Marriner S. Eccles Federal Reserve building in Washington. 

The Marriner S. Eccles Federal Reserve building in Washington. 

Photographer: Andrew Harrer/Bloomberg

Updated on

Fear is turning into exuberance in credit markets.

Demand for U.S. corporate bonds has surged after the Federal Reserve signaled that it’s done raising interest rates for now and eased investor concerns that rate hikes will choke off economic growth and crimp profits. High-yield bonds gained 4.9 percent this year through Thursday, the best start to a year since 2009, and saw the biggest fund inflows this week since July 2016.