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Investment-grade CDS prices near pre-COVID lows as Treasury yields rise and rate cut odds drop.

Market News
05 Sep 2026
Seeking Alpha
View Source
Neutral
Investment-grade CDS prices near pre-COVID lows as Treasury yields rise and rate cut odds drop.

Investment-grade credit default swap (CDS) prices fell below 50 basis points, nearing lows not seen since February 2020, indicating improved credit market confidence. Meanwhile, the VIX volatility index dropped below 14 for the first time since December, signaling reduced market fear. Ten-year Treasury yields rose to 4.78%, approaching multi-year highs last seen in October 2023. The market lowered the probability of a Federal Reserve rate cut in September from 65% to 50% following dovish comments from Fed governor Waller, reflecting cautious optimism about economic conditions and monetary policy direction.

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