Fading Optimism on Rates Signals Trouble Ahead for $425 Billion Debt Wall
- Strong jobs report reinforces likelihood of higher for longer
- No new junk bonds were launched in US as risk appetite falls
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Friday’s sizzling jobs report is bolstering the probability of another Federal Reserve rate increase this year, adding to pain in credit markets that are already getting hurt by a year-long jump in yields.
The strength of the US labor market increases the likelihood that the central bank won’t pivot to cutting rates next year. That’s a big negative for corporate America, which has continued boosting its debt levels even as yields have surged over the last year.