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FTfm: Fixed Income

US Federal Reserve forecasts suggesting ‘higher for longer’ interest rates have caused bond yields to soar — and bondholders to sell. Borrowers on floating rates are also feeling pain. But money market funds and catastrophe bonds still have fans

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‘Higher for longer’ fears fade at first sign of a slowdown
Weaker economic data have helped bolster prices in the battered US bond market
Oversupply of US debt leaves few takers for Treasuries
Issuance of $1tn-worth of government bonds in space of three months creates a glut as big buyers retreat
Money market funds spring a leak after year of record inflows
Questions arise over cash-based vehicles’ competitiveness with longer-dated paper, and whether outflows will accelerate
Mortgage-backed securities market waits for interest rate clouds to lift
Historically expensive home loans have hit issuance, while demand from key buyers has slumped
Floating-rate exposure set to cause more balance-sheet pain
Leveraged companies that did not hedge against rising rates may be forced to tap cash reserves to cover spending
Catastrophe bond returns rebound as hurricanes miss US east coast
A 20 per cent return may be achieved this year but climate change increase the risks