why are junk bonds growing out of control

why are junk bonds growing out of control The explanation is simple The Fed€™s policies are a boon for Wall Street, but the market is simply not getting the money that is being created by the trillions, because of the Feds Quantitative Easing (QE) policies That is, the Fed€™s total assets are near $9 trillion, but most of that is sitting on the books of the Fed and not flowing through the economy https://fred.stlouisfed.org/series/WALCL The Wall Street Journal article notes that, “in the past four years, commercial and industrial loans outstanding is $3 trillion https://fred.stlouisfed.org/series/BUSLOANS?back=https%3A%2F%2Fwww.google.com%2Fsearch%3Fclient%3Dsafari%26as_qdr%3Dall%26as_occt%3Dany%26safe%3Dactive%26as_q%3Dwhat+is+the+total+industrial+loans%26channel%3Daplab%26source%3Da-app1%26hl%3Den Where did the money go? To the top of the economy, where it helps the super-rich get even richer, and makes the stock market bubble bigger than ever As MarketWatchs Rex Nutting notes, €œthe top 1% of households had a 27% share of all income in 2012, the highest since the government began collecting the data in 1967 The stock market is rising partly because the biggest companies in the US are sitting on record piles of cash https://www.currentmarketvaluation.com/posts/2021/03/junk-bonds.php But the rich don€™t just hoard cash They invest in bonds, stocks, real estate, and anything else they think will make them money They invest in junk bonds because they are high yield, but also because there is a lot of demand for them According to the Wall Street Journal, Junk-bond investors have been on a hot streak And high-yield bond funds have attracted $10 trillion dollars https://www.cnbc.com/2021/07/14/the-junk-bond-market-is-on-fire-this-year-as-yields-hit-a-record-low.html one economist who warns: if you look back to the late 1990s, high-yield bonds were a great investment, but the risks were there What goes up must come down Junk bonds are a risky investment in todays economy, just like they were in the last bubble The Feds zero interest rate policy has created some bizarre market distortions Junk bonds have become a safe haven for investors as the stock market has swooned But if the stock market begins to fall and the economy continues to sputter, investors will get nervous, and junk bonds will lose their safe haven€ status