When yield isn't enough

A Federal Reserve hike lifts yields, but attractive income alone does not mean investors are being paid for the credit risk they take. Higher yields strengthen the foundation for income, but an attractive yield alone doesn't mean you're being paid for credit risk—both must be assessed together. Curve positioning matters: short-term yields may rise with policy rates, while persistent deficits and capital competition could keep long-term borrowing costs elevated even after the Fed eases. Financial strength is a competitive moat—companies with durable cash flows and manageable debt can keep investing when weaker competitors face financing constraints.