Worst January Ever for Junk Bonds Shows Fed’s Surprise Impact
- 2.73% loss was most for any month since early in the pandemic
- ‘It’s far too early to load the boat,’ Thornburg investor says
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U.S. junk bonds just posted their worst start to a year ever, and their dour performance last month made them a potentially surprising victim of the Federal Reserve’s looming rate-hike campaign.
The Bloomberg U.S. Corporate High Yield Bond Index lost 2.73% last month on a total return basis, the biggest January decline on record and the worst month of any kind since the pandemic rocked markets in March 2020.