Group 1 - A key valuation metric for U.S. corporate bonds has reached its highest level in nearly three decades, following the Federal Reserve's first interest rate cut since 2024, prompting investors to lock in still high yields [1] - The risk premium for U.S. investment-grade corporate bonds has narrowed to just 72 basis points, marking a new low not seen in decades, with the spread previously touching 73 basis points in August, the lowest since 1998 [1] - High-grade bond average yields are currently at 4.76%, significantly above the average level of approximately 3.6% since 2010 [1] Group 2 - For most of the past three years, average yields have remained above 5% due to the Federal Reserve's rate hikes aimed at curbing post-pandemic inflation, which has driven demand from investors like pension plans that need to fund long-term liabilities [2] - The Federal Reserve's updated economic forecasts indicate two more 25 basis point rate cuts this year, which could further lower yields and heighten urgency among some investors [2] - The current environment of tight spreads is considered ideal, with solid fundamentals, strong demand, and no excessive supply pressure [2]