Bond mountaineers easily scale the maturity wall

IF YOU take your signals from the corporate bond market, the world looks much less scary now than it did a few months ago. These days, high-yield US bonds yield just 378 basis points over Treasuries, more than two percentage points below the 2022 high and close to the narrowest gap since the Federal Reserve started raising interest rates last year.

Some of that reflects the vagaries of investor sentiment, no doubt, but there have been some encouraging developments to suggest the trend just may be justified.

First, the hand-wringing about the Great Maturity Wall appears to have been wildly overdone. A year ago, the bear case held that interest rates were rising and the economy was deteriorating, at the same time that a surfeit of high-yield debt was coming due.