Analysis: Investors brace for more weakness in U.S. corporate debt – Reuters

Analysis: Investors brace for more weakness in U.S. corporate debt – Reuters

NEW YORK, Feb 8 (Reuters) - Investors are preparing for more downside in U.S. credit markets, as bets that the Federal Reserve will become more aggressive than previously expected threaten to further drive up yields and pressure prices.

After a comparatively placid January, corporate debt has started this month with sharp losses. The Markit CDX North American Investment Grade Index , a basket of credit default swaps that serves as a gauge of credit risk, recently stood at around 65 basis points after widening to its biggest spread since October 2020 on Friday following strong U.S. jobs numbers that sent government bond yields soaring to their highest level in more than two years.