How falling oil can sully bonds outside of the energy sector
October 05, 2016 at 15:45 PM EDT
When oil prices were dropping, the yield spread—which compares the yields between typically lower-rated, thus riskier, bonds to higher-rated bonds—gaped higher for non-energy bonds, too. That was a surprise to financial markets and to New York Federal Reserve researchers who took a deeper look at the counterintuitive market movement.