Skip to Content
Credit Insights

Surging U.S. Interest Rates Hardly Dent Demand for Corporate Bonds

Corporate credit spreads on investment-grade corporate bonds held steady and high-yield bonds backed off slightly.

Interest rates in the United States have generally been on a gradually rising trend for the past few years as the Federal Reserve has been hiking them to normalize monetary policy. More recently, interest rates began rising after the European Union announced its plan to begin pulling back on its asset-purchase program in Europe. Then, following strong economic metrics and intimations from U.S. monetary policy officials that rates still have much further to rise, U.S. interest rates spiked significantly higher across the entire yield curve last week. The contagion sent interest rates higher across other sovereign bond markets as well.

While the yield on the 2-year Treasury rose only 6 basis points to 2.88% last week, the middle and longer ends of the curve rose much more. In the belly of the curve, the 5-year increased 12 basis points to 3.07%, and in the longer end, the 10-year increased 17 basis points to 3.23% while the 30-year spiked 19 basis points to 3.40%. The yields on both the 2- and 5-year bonds have long been steadily marching higher in conjunction with the rising federal-funds rate and are at their highest levels since mid-2008. While the yield on the 10-year has not increased as much as the shorter-dated bonds thus far this year, it is quickly catching up and is at its highest level since mid-2011.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.