Foreign investors have been buying more US corporate bonds, a trend that will likely continue as Federal Reserve monetary easing lowers the cost of hedging and investors hunt for yield.

The outlook for corporate debt is improving now that the Federal Reserve has begun cutting interest rates, according to the latest Bloomberg Markets Live Pulse survey.

Companies and governments around the globe spent the past month streaming into debt markets, seizing on declining interest rates ahead of an uncertain US presidential election that many fear will spur volatility in markets.

After two days of record sales in the US blue-chip corporate debt market, another 11 companies are looking to sell bonds on Thursday, and demand for the securities is holding strong by key measures.

Corporate borrowers are selling investment-grade bonds at the fastest clip since 2020 as companies take advantage of lower yields to issue debt before the November election.

Risk premiums on US investment-grade corporate bonds have narrowed to the tightest level in nearly two years on expectations that the Federal Reserve has reached the peak of its monetary-tightening cycle.

Banks are taking a cautious approach in the investment-grade bond market amid some of the wildest swings in Treasuries in recent memory, waiting for pockets of calm to emerge as they seek to borrow before US officials can raise interest rates or tighten regulations further.

Credit investors are turning more optimistic that the Federal Reserve will pull inflation under control without shoving the US economy into a deep recession.

January’s optimism about the bond market seems like a long time ago.

Tesla Inc. has secured a new $5 billion revolving credit facility, another sign that the company is nearing investment-grade status.

Banks globally are finding there are fewer corporate acquisitions to finance now, forcing lenders to focus on a less lucrative business: giving loans to corporations looking to cover rising expenses amid high inflation.

Meta Platforms Inc., one of the few S&P 500 companies without debt, is selling $10 billion in its first ever corporate bond sale as its cash flow and stock price fall.

Markets have already priced in a 50-basis-point hike on Wednesday, expecting the Fed will take a quicker approach in order to squash stubborn inflation. Accelerating U.S. labor costs and a resilient consumer are effectively giving the central bank the green light to raise interest rates by a half-point next week to tamp down price pressures.