It is central banks driving gains in the fixed income market, not the U.S. election

Treasuries weren't the only beneficiaries of the volatility spurred by the U.S. election. Surprisingly, risky assets have been rallying too. U.S. junk credit spreads have tightened significantly while investment-grade spreads are lagging. We believe that investors are buying higher-yielding assets because they expect more support from the Federal Reserve. The...