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FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul February 7, 2011. REUTERS/Lee Jae-Won
NEW YORK (Reuters) - A major exchange-traded fund tracking the U.S. investment-grade corporate bond market fell on Friday to its lowest since May 2020, after blowout employment data and comments from Federal Reserve Chair Jerome Powell on Thursday increased duration risk.
BlackRock’s iShares iBoxx Investment Grade Corporate Bond ETF fell to a 10-month low of $129.27 and was last trading down 0.33% to $129.51. Since the start of the year, LQD has lost more than 6%.
The improving economic data and increase in inflation expectations that have driven the U.S. benchmark 10-year Treasury yield to its highest in more than a year have also driven yields up - and prices down - on investment-grade debt. Investment-grade bonds tend to have longer durations than those in the junk-rated market. They are therefore more sensitive to inflation risks,
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