Mutual funds sell off lev loans as market prices in Fed rate cut

Alexander Saeedy

March 25, 2019 09:45 PM

NYSE, selloff, NYSE PA 230x150 — (181011) -- NEW YORK, Oct. 11, 2018 (Xinhua) -- The trading information is seen on electronic screens at the New York Stock Exchange in New York, the United States, on Oct. 11, 2018. U.S. stocks extended deep losses in volatile trading on Thursday. The Dow Jones Industrial Average fell 545.91 points, or 2.13 percent, to 25,052.83. The S&P 500 was down 57.31 points, or 2.06 percent, to 2,728.37. The Nasdaq Composite Index was down 92.99 points, or 1.25 percent, to 7,329.06. (Xinhua/Wang Ying) | Wang Ying/Xinhua News Agency/PA Images

Mounting expectations that the US Federal Reserve could slash interest rates in 2019 is a prompting a new wave of redemptions among leveraged loan funds, similar to the selloff in the fourth quarter of last year that pushed CLO warehouses underwater and resulted in significant volatility through year end.

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Alexander Saeedy