Credit-Card Interest Rates Soar to Record High, Bond Yields Drop to Record Low: What Gives?

by Wolf Richter
Wolf Street

My “Credit-Card Spread Index” blows out. Heck if I knew what that means, but it doesn’t mean anything good.

The average yield of investment-grade bonds (as per ICE BofAML US Corporate Yield index) dropped to a record low of 2.62% this week. This comes after the Fed cut its policy rates three times last year, from already low levels, to even lower levels, and after it bailed out the repo-market with over $400 billion over a period of just three months. Bond yields across the board have fallen, and it made borrowing for companies extremely cheap:

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