Skip to content

US Debt Buyers Brace for Fed to Hike ‘Until Something Breaks’

  • Credit risk gauges whipsawed as market digested Powell message
  • High-grade primary market muted as borrowers remain cautious
Updated on

US corporate debt markets fluctuated between losses and gains after Federal Reserve officials raised interest rates by 75 basis points for the third consecutive time and stoked expectations among debt investors for even tighter policy ahead.

A key measure of perceived US credit risk, the Markit CDX North American Investment Grade Index, which declines as credit risk drops, widened 2.11 basis points to 100.6 as of 4:31 p.m. in New York to the highest on an intraday basis since July 6, after initially tightening. The CDX high-yield index, which rises as credit risk declines, fell 0.5 points to 98.5.