Credit Buyers Double Down on BBB Bonds and High-Quality Junk
- Fed’s increased willingness to cut rates drives risk-on rally
- BBs and BBBs leading the charge as credit broadly outperforms
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As the Federal Reserve moves closer to expanding the money supply, corporate bond investors are snatching up notes and taking more risk-- but not too much more.
Prices on the lowest-rated investment-grade bonds are jumping, as are the highest-rated junk bonds. While high-yield investors are still favoring relatively safer securities, those that invest in high-grade are reaching for yield in the riskiest part of that market.