Investment-Grade Ylds at New Lows

Bond yields hit lowest level since 1986 as Fed maintains near-zero rates.

Investment-grade bond yields plunged to the lowest since at least October 1986 yesterday as the Federal Reserve pledges to hold interest rates near zero percent through at least late 2014 and investors seek safer assets.

The yield on Bank of America Merrill Lynch’s U.S. Corporate Master index fell to 3.44 percent yesterday, passing the previous low of 3.45 percent reached in August. That’s lower than the 3.5 percent the U.S. government’s 10-year Treasury yielded as recently as April, before falling to 1.90 percent.

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