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Credit Market Rallies Most in Two Years as Inflation Abates

Nov. 11, 2022, 6:45 AM

US credit markets surged by the most in two years on Thursday after inflation showed signs of moderating, boosting the prospects of corporate borrowers.

A key measure of US credit risk -- the Markit CDX North American Investment Grade Index -- saw spreads tighten the most since September 2020, while the equivalent high-yield gauge rallied the most since November 2020. Traders moved to temper rate hike predictions for December’s Federal Reserve meeting, though investors remain skeptical of a pivot given that inflation remains high.

“Ride the wave for now,” Scott Kimball, managing director of fixed income at Loop Capital ...