U.S. Credit Market Risk Gauge Spikes to Highest in Four Months
- Credit swaps index climbs as 10-year Treasuries top 1.5%
- High-grade credit having worst year for returns since 1980
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A measure of U.S. corporate credit risk hit a four-month high Thursday after Federal Reserve Chairman Jerome Powell underwhelmed markets by refraining from pushing back more forcefully against the recent spike in yields.
The Markit CDX North American Investment Grade Index widened 1.9 basis points to 56.5 basis points, according to data compiled by Bloomberg. That’s the highest level since Nov. 4. Investors use the credit-default swaps index to hedge against losses on corporate bonds or to bet on gains in the market.