(Bloomberg) — Global junk bonds extended a selloff Friday after China retaliated against US President Donald Trump’s latest tariffs and Federal Reserve Chair Jerome Powell signaled no hurry to lower interest rates.

The extra yield investors demand to own the risky debt instead of Treasuries widened a further 39 basis points Friday to 4.24 percentage points, the Bloomberg Global High Yield Corporate index shows. That’s the highest level since November 2023, and comes a day after the biggest jump in spreads since March 2020, Bloomberg-compiled data shows.

US high-yield premiums spiked 40 basis points to 4.27 percentage points, a separate Bloomberg index shows, also the highest since November 2023. Average prices in the US leveraged loan market also weakened again, falling to 95.01 cents on the dollar, according to a Morningstar LSTA leveraged loan index.

Other gauges of credit risk are signaling just how nervous investors are getting as the sweeping tariffs sent indexes that track credit-default swaps surging by the most since March 2023 in both the US and Europe.

“At the start of 2025, consensus suggested that growth would stay steady, inflation would continue its descent, and that technicals would remain solid for both supply and demand in the BSL market,” wrote Barclays Plc analysts led by Corry Short in a Friday note. “However, in recent weeks, sentiment shifted sharply amid tariff uncertainty and stagflationary concerns.”

While global high-yield spreads are widening from historical lows, having touched their lowest since 2007 only in February, issuance is largely on pause. Some deals launched before the deepening rout are struggling, raising the prospect that banks will be stuck holding debt.

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