A key measure of US corporate-bond valuations reached the most expensive level in nearly three decades as investors raced to lock in still-elevated yields following the Federal Reserve’s first interest rate cut since 2024.
Risk premiums on US investment-grade corporate bonds, or the extra yield above Treasuries that investors demand for owning higher-quality company debt, shrank to just 72 basis points Thursday, according to Bloomberg index data. That spread’s decline marked a new multi-decade low for the measure, which in August reached 73 basis points, the lowest since 1998.