US Junk Bonds Headed for Worst Quarterly Returns Since 2022

US high-yield bonds are on track to post their first negative quarterly returns since 2022 as fears of artificial intelligence disrupting software makers and rising Treasury yields made investors more reluctant to bet on riskier companies.

High-yield bond returns have dropped 1.1% this quarter through Monday’s close, with triple C rated bonds — the riskiest tier — falling the most with a 1.85% decline. Overall junk bond returns are the worst since a 9.8% decline in the second quarter of 2022, when investors were concerned about rising inflation and aggressive tightening by the Federal Reserve.