Trump Win Boosts Demand for Credit, With Spreads at 1998 Low
- Most pros haven’t seen such low spreads: Brown Brothers
- Hunt for higher yields offsets Trump policy uncertainty
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Investors are pouring money into US corporate bonds after Donald Trump won the US presidential election, stocks surged, and the Federal Reserve cut rates again, pushing risk premiums to their lowest levels in more than 25 years.
Average US investment-grade bond spreads, the extra yield over US Treasuries that investors get paid to hold riskier debt, narrowed two basis points to 75 at Thursday’s close, according to data compiled by Bloomberg. That’s the tightest level since May 1998.