October 09, 2023 06:00 AM
Graphic: Could investment-grade yields keep rising?
The bond market seems more focused on macroeconomic factors such as inflation than a potential government shutdown — postponed for now. Following the recent Federal Reserve meeting, the expectation is for elevated short-term interest rates to persist. That, combined with skyrocketing longer-term Treasury yields, will hurt corporate investment-grade returns. Should economic growth slow, widening spreads could further diminish returns.
Treasury yields and investment-grade spreads during major shutdowns
Corporate investment-grade spreads and yields