On February 26, according to FT analyst Joe Rennison, the war in Ukraine exacerbated the market’s inflationary pressures and sensitivity to interest rate changes.
Most investors have withdrawn billions of dollars from funds that buy U.S. high-yield bonds and put money into funds that buy U.S. leveraged loans, where the average price of U.S. leveraged loans has fallen to its lowest level since last August.
At the same time, U.S. high-yield credit spreads, which measure the difference between corporate bond and U.S. Treasury yields, have also gradually moved higher, suggesting a slow rise in market credit risk.