A new Federal Reserve gauge is showing moderate but rising signs of distress in trading of high-quality corporate bonds, reflecting investor jitters about a slowing economy.
The alert comes from a new measurement called the Corporate Bond Market Distress Index, or CMDI, which the Fed’s New York branch plans to update once a month. The first snapshot, offered Wednesday, shows greater strain for the roughly $5 trillion market for U.S. investment-grade corporate bonds, compared with historically low levels in newly released back-looking data from late last year.
