As the coronavirus pandemic sweeps through the world, we are experiencing massive waves of stock and bond volatility. The speed of the dislocation is breathtaking. While the stock market sell-off generates much publicity, the fixed income sell-off is unprecedented. In only six days, high yield bonds have sold off to levels that took nearly 60 days to reach during the global financial crisis. The same is true across fixed income, without regard to credit quality: investment grade, agency mortgage, and even treasuries have all seen unprecedented selling.
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