Investments

"Fed watchers will be parsing Powell's comments for signs that a 50bp rate cut is on the table for September," noted Lauren Saidel-Baker, an economist with ITR Economics. "However, the notoriously tight-lipped chair is unlikely to confirm this, making a 25bp cut the most likely outcome."

The fund, Sound Point Meridian Capital, invests in CLO equity. Fewer than 10 of these closed-end funds trade now, partly because starting one requires a backer willing to leave the money invested for years.

The company is selling bonds in five parts, and the longest portion of the deal, a 40-year note, will yield 1 percentage point above Treasuries.

The change in tone was obvious on Monday, when SBA Communications Corp. postponed the repricing of a $2.3 billion term loan.

The pension plan's investment is a show of support from one of the world's largest private markets investors for the securities.

Spreads for Fannie Mae current coupon mortgage bonds, a proxy for securities being created now, jumped 0.07 percentage point to 1.41 percentage point, on track for the most widening in a day since April.

There's been a resurgence of interest in CLOs. Gross issuance is on track for a record year in Europe, while year-to-date issuance in the market has already exceeded 2023's full-year volume.

Wagers on aggressive easing by the Fed had been rising in recent days amid debate over whether the central bank should act when it meets next week.

Yields on policy-sensitive two-year Treasuries slid three basis points on Wednesday, while those on 10-year bonds were up by about the same amount.

Yields across maturities rose by three to five basis points as volumes picked up in midday Monday trading in New York.