Short Term Bond Issues Started After FED's Interest Rate Decision

Short term bond issues started after the FED's interest rate decision. The FED kept the interest rate constant.

At the interest meeting held yesterday, the FED (US Federal Reserve) decided to keep the interest rates constant. After the FED repeated its statement that they would keep the interest rates close to zero until at least 2023, the companies took action for the bond issues. While the dovish rhetoric at the FED's meeting held yesterday caused a decrease in short-term interest rates, issuing bonds to companies in Asia became a motivating tool. The shear of dollar denominated bonds on investment grade in Asia showed the biggest tightening since November. According to data compiled by Bloomberg, the private sector's 10-year or less dollar-denominated bond issues have exceeded $ 277 billion this year. While this figure corresponds to 76 percent of total issues, it was recorded as the highest rate of at least 10 quarters. In addition, the interest rate decision taken by the FED led to an increase in long-term yields. Expectations of faster growth and inflation have increased with the continuation of ultra loose monetary policies of actors trading in bonds.     This article has contributions of Bloomberg and Bloomberg HT.