(Bloomberg) -- US high-grade corporate bonds logged their first quarterly gain this year in the past three months, returning 5.8% for its best performance since the final stanza of 2023, according to a Bloomberg index.
As investors saw the start of the Federal Reserve’s rate-cut cycle pushed out to September, investment-grade notes logged slight quarterly losses despite strong demand of new bonds. Year-to-date, orders have exceeded supply by 3.7 times, according to data compiled by Bloomberg. Last month’s rate was 5.4 times despite a global surge of debt issuance.
Improved clarity on the Fed’s policy path since the spring helped push Treasury yields down to their lowest levels in more than a year. That’s allowed high-grade corporate notes to post five straight months of gains.
Log another positive return in October and it would be the market’s longest uptrend since 2019. During the current winning streak, monthly returns have averaged 1.65%. September slightly topped that at 1.77%.
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