The Globe and Mail reports in its Thursday edition that investor optimism that the Federal Reserve will start cutting interest rates is breathing new life into the market for junk debt, providing relief to the lowest-rated companies and likely capping the rate of defaults in 2024. A Reuters dispatch to The Globe reports that as the Fed started to raise rates in 2022 and worries about defaults grew, companies rated below investment grade saw tepid demand from investors for their loans and bonds. Many such companies turned to roundabout ways to raise money to get ahead of a $300-billion (U.S.) wall of bond and loan maturities in the next two years. Of late, however, yields have fallen as investors bet the Fed will soon start cutting rates. Markets are now pricing the Fed's key policy rate to fall as much as 1.5 percentage points below the current 5.25-per-cent to 5.50-per-cent range by the end of next year. Expectations of such a pivot have led to a resurgence in demand for high-yielding debt. Junk bond spreads, or the premium investors charge over U.S. Treasuries for taking on the risk, have on average tightened 38 basis points since September to 343 basis points, the lowest level since April 5, 2022.