Fed-backed credit market gives investors a reason not to worry even as volatility returns to stocks

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Credit spreads have tightened to nearly pre-coronavirus levels since the Fed stepped in with massive bond-buying programs to quell the tumult.

after an alarming pullback last week triggered by signs of a coronavirus resurgence.

Even during the brutal sell-off last week — the worst weekly performance for the S&P 500 since March — the credit market shrugged off the pandemic scares, leading many to believe stock traders were overacting. Credit spreads have tightened to nearly pre-coronavirus levels since the Fed stepped in. Investment-grade spreads narrowed to about 2.3 percentage points over Treasuries, after jumping to the highest level since 2009 in March. High-yield spreads also stayed at the 6 percentage point range over Treasuries after rising to above 11 percentage points in March.

Investors are piling into bond funds at a historic pace on the back of the Fed's commitment to support the credit market. U.S. investment-grade mutual funds and ETFs experienced another week of strong inflows at more than $11 billion in the week ending on June 10, the second highest ever and following the record $14.8 billion inflow the prior week, according to Bank of America.spiked to a 52-week high on Monday in the wake of the Fed announcement.

 

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Why doesn't the federalreserve let the markets function? Seems they are meddling in markets way to much.

It’s only a matter of time before average people start to wonder why we suddenly have all this money to bail out a fraction of 1% of the richest people in society, yet we can’t afford to pay for education or healthcare & our infrastructure is crumbling to 3 world status.

就这?

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