Returns jump across US corporate credit to start the year

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Total returns on US corporate credit have jumped to start the year, driven by more favorable sentiment across the capital markets, as investors react to a third straight month of declining inflation and the expectation that the Federal Reserve is closer to completing rate hikes. The risk-on environment was led by US equities, with the S&P 500 7.2% higher as of Wednesday, February 8, followed by US HY bonds at 4.2%, US IG bonds at 3.3% and US leveraged loans at 3.3%.