Riskiest debt becomes most expensive because of Fed-driven rally

10/26/2010 | Bloomberg

The Federal Reserve is encouraging investors to pour money into the lowest-rated high-yield bonds by keeping interest rates low and considering the idea of more bond purchases. The situation has prompted the riskiest debt to emerge as the most expensive, fueling concern that fixed-income securities have become overvalued. Meanwhile, issuers of high-yield bonds have been eager to tap into the rally.

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