U.S. Junk Bond Yields Hit Record Low as Vaccine Hope Fuels Rally
- Debt surged on prospect of Fed support amid split government
- Investors maintain search for yield and pour into risky assets
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U.S. junk bond yields rode a rally in risk assets to a record low on Monday, as investors buoyed by a Joe Biden presidential victory and progress toward a Covid-19 vaccine poured into the debt of riskier companies.
The average yield for the Bloomberg Barclays U.S. corporate high yield index plummeted to 4.56%, sinking below the previous record of 4.83% set in June 2014. The 45 basis point decline from Friday’s close was the steepest fall since April 9, when the Federal Reserve expanded its corporate bond purchases to include some junk debt.