Why Wall St. Banks Are Dumping Corporate Debt

The video discusses how major banks are reducing risk due to new regulations and the Volcker Rule, leading to a decreased appetite for risk. This has created a lopsided market with many investors heavily invested in high-yield and investment-grade bonds, making them vulnerable to interest rate hikes. Analysts from major Wall Street banks are sending mixed signals about market actions, with some suggesting low rates will persist. Investors are adapting by focusing on liquid assets and derivatives to manage potential volatility.

Explain the relationship between mutual fund investors' actions and market prices.

What strategies are investors using to manage volatility in the current market?