Borrowing isn’t cheap right now, especially for riskier businesses.
Investors expect a healthy economy and strength in the private sector, which is limiting the rise in corporate bond yields.
As government bond yields have fallen, corporate bonds have attracted more investors. The cash may boost private-sector spending.
Many investors see big companies as healthy and want to get into the market before the Federal Reserve cuts interest rates.
Both government and corporate bond yields have been climbing. For many companies, though, higher revenue more than covers the cost.
Bond investors are demanding higher corporate bond yields. That’s a good sign about where the economy’s headed this year.
Companies hurt by the pandemic could end up paying investors a full percentage point more in interest to buy their bonds.
Some borrow less because they’re optimistic, some because they’re pessimistic and some because they’re cautious.
The Federal Reserve is buying a broad cross-section of bonds to make sure firms have the money they need to weather the COVID-19 pandemic.
The Federal Reserve is prepared to invest hundreds of billions of dollars in corporate bond ETFs to support businesses, and make it possible for these businesses to borrow during the Coronavirus downturn.
