Pursuits
Junk Bond Misery Backs Fed Case for Gradual Rate Rise, No Delay
- Yellen pause unlikely as Fed aims for low and slow tightening
- High yield distress not seen as a re-run of subprime crisis
Deep Dive: Junk-Rated Stocks Echo Credit Warning
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Junk bonds won’t stop Janet Yellen from raising interest rates this week, but they may provide an added incentive for the Federal Reserve chair to communicate clearly that future tightening will come gradually and will signal confidence in the economy.
The policy-setting Federal Open Market Committee concludes a two-day meeting in Washington on Wednesday and is widely expected to announce that the economy can handle the first rate increase since 2006, despite steep losses on high yield bonds that began last week.