The Easy Money Has Already Been Made in Bonds: Credit Weekly

Asset managers, worried that the end-of-year rally on expectations of a soft landing was overly optimistic, are selling bonds and boosting their cash holdings.

Bond allocations among fund overseers have tumbled 17 percentage points since the same time last month, according to a Bank of America Corp. fund manager survey published this week. The amount of money they parked in money market funds and other cash vehicles rose 13 percentage points in the same period.

Taking profits in bonds makes sense now. Because short-term rates are so high relative to intermediate- and longer-term yields, a junk bond doesn’t pay ...