Consumers are worried about the economy ahead yet. Investors in corporate bonds live in a different world.

I'm David Brancaccio in Los Angeles. When the price of bonds fall, the effective interest rate, the yield goes up. That's how we track market interest rates. These collective decisions in the market for government bonds are a signal

that the pros and their algorithms figure the Federal Reserve is about to cut interest rates again

this month. Meanwhile, corporations also raise money with bonds, and the corporate bond market is also

sending signals about where the economy may be headed. Marketplaces Justin Ho is here to read the code.

Corporate bonds are generally considered to be riskier than government bonds, since companies are just

more likely to run into trouble and default. As a result, investors want to get additional compensation

to take on that additional credit risk. That's Lawrence Gillum, Chief Fixed Income Strategist at LPL Financial.

That extra compensation that corporate bonds pay out compared to government bonds is called

a spread, and those spreads can change.

There's been times where spreads are lower, obviously times when spreads are higher as well,

this time being one of those times where spreads are lower.

In fact, spreads have been fairly low for most of this year. In other words, investors aren't

demanding much extra compensation from companies. John Canavan, lead market analyst at Oxford

Economics, says that's a sign investors think economic growth will stay strong and that

companies will be in a good position to pay back

their debt. If that's the case, then you are optimistic about getting your money back. You are not

going to demand as high a yield from these corporations because you believe your risk is a little bit

less. And that means corporations themselves will find it easier and cheaper to borrow money.

If you're willing to give me $100 million at very friendly terms, then I can find ways to invest that.

I can find ways to help build my company with that.

And that kind of investment can help the economy.

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