Stagflation Fears Bringing Credit to Worst Quarter Since 2008

U.S. corporate bonds are on track for their worst quarter since the 2008 global financial crisis, and the outlook remains bleak, as investors fret about inflation strong enough to trigger Federal Reserve rate hikes and weigh on economic growth.

The U.S. investment-grade bond index declined for a fifth straight day on Friday, down 2.7% for the week, its worst on a total return basis since March 2020, according to Bloomberg index data. The debt has lost 8% this year, a level that would amount to the worst quarter in years if it persists till the end of the month.

The ...