Kelsey Berro, a fixed income portfolio manager at JPMorgan Asset Management, suggests that the bond market is capable of managing a significant increase in high-grade corporate bond issuance. This comes as the US investment-grade bond market recently experienced its busiest day since January, with 19 firms issuing a combined $27.6 billion in notes, including companies like Tyson Foods Inc., utilities, and overseas banks.
Berro's perspective arrives even as the US high-grade corporate bond market has shown signs of stress. According to a Federal Reserve Bank of New York index, July saw the highest level of dysfunction in this market in nearly three years, with the investment-grade sub-index reaching its peak since November 2023.
Berro has previously noted that demand for fixed income is accelerating at higher yield levels, distinguishing the current bond market from past selloffs. While fixed income traders are described as focused rather than relaxed, she posits that lower Treasury yields are unsustainable unless supported by fundamental economic conditions. Her comments highlight a nuanced view of the bond market's resilience amidst increased issuance and underlying stresses.
