U.S. corporate debt markets fluctuated between losses and gains after Federal Reserve officials raised interest rates by 75 basis points (bps) for the third consecutive time and stoked expectations among debt investors for even tighter policy ahead.

A key measure of perceived U.S. credit risk, the Markit CDX North American Investment Grade Index, which declines as credit risk drops, widened 2.11 bps, to 100.6, as of 4:31 p.m. in New York, to the highest on an intraday basis since July 6, after initially tightening. The CDX high-yield index, which rises as credit risk declines, fell 0.5 points to 98.5.

"I believe 75 is the new 25 until something breaks, and nothing has broken yet," said Bill Zox, a high-yield portfolio manager at Brandywine Global Investment Management. "The Fed is not anywhere close to a pause or a pivot. They are laser-focused on breaking inflation. A key question is what else might they break."

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.