DISTRESS WATCH: Troubled Debt Tally Declines to Six-Month Low

Bets that the Federal Reserve will lower interest rates for the first time this year, supporting a cooling economy, helped to shrink the global distressed debt pile to the smallest since March.

Traders are now fully pricing a rate cut on Wednesday and a three-in-four chance of two more by year end. That would help lower borrowing costs across the board and come as a relief to weaker and troubled companies in particular.

“Fed cuts are typically bullish unless the economy is already in a downturn,” BNP Paribas strategists including Viktor Hjort wrote in a report. While the latest US ...