US corporate bond markets cautious despite rebound in new issuances and credit spreads.

From Yahoo Finance: 2025-04-29 14:55:00

U.S. corporate bond markets are cautious about the economy and inflation despite rebound in new issuances and credit spreads since Trump’s tariff announcements. 15 companies, including Alphabet, issued new bonds raising $18.3 billion with $95 billion in orders. Spreads for high-grade bonds tightened, but investors remain nervous about economic uncertainty and policy around tariffs.

Investors are shying away from risk, preferring highest-rated companies and worrying about interest rates amid inflation fears due to tariffs. Bond demand on Monday reflects risk-off sentiment. Investors fear inflation pressures due to tariffs will restrict Fed rate easing. Trump’s tariff announcement caused global market pandemonium with investors fleeing risky assets.

Trump delayed tariffs and rolled back some measures, easing market tension. Bond fund outflows continue but slowed. Monday’s bond offerings show preference for higher quality securities. Market remains on high alert despite pickup in issuance and tightening of credit spreads. Forecast for year-end credit spreads is higher than current levels but not reflective of crisis.

Six new high-grade and two high-yield bond offerings were in the market on Tuesday. Bond issuance now recommended while conditions are stable. Funding costs could rise but not prohibitively expensive for higher-rated borrowers. Market conditions could change with labor market and inflation data release and ongoing risk of adverse trade and tariff policy headlines.



Read more at Yahoo Finance: Analysis-US corporate bond markets betray caution behind recent rebound