Reported about 2 months ago
In a recent report, junk bond expert Marty Fridson cautions that while the credit markets are rallying with expectations of lower interest rates, the impact on high-yield debt might not be as significant as investors hope. He notes that the sensitivity of junk bonds to interest rate changes has reached an all-time low due to decreased junk issuance and a smaller concentration of high-quality bonds. This may lead to a muted response in bond prices when the Federal Reserve cuts rates, despite the potential for an increase in 'fallen angels'—companies downgraded to junk status—should the economy slow.
Source: YAHOO