The bubble spawned by the Fed in the corporate bond market this year - which was already at unprecedented levels thanks to record low interest rates before Powell's March announcement he would backstop the bond market and buy investment grade and fallen angel bonds - is nothing short is staggering.

Consider this: on Tuesday, total new investment grade issuance totaled $11.2BN across 11 deals, bringing the total to $195.3BN MTD and - drumroll - just over $1 trillion, or $1,002.9BN YTD, or less than five months. And the bigger the bubble, the greater the demand: according to Bank of America, the average break performance improved to -11.9bps Tuesday from -8.0bps Monday, with the week's new issues already trading 8.4bps tighter on average from pricing!

The reason for this relentless bid - the Fed's backstop of this most important (for future buybacks) market: as a result, inflows to US IG bond funds and ETFs have rebounded sharply in April and May from the record outflows in March, with BofA noting that "about 90% of the total AUM is in "Agg" type funds that provide broad US IG fixed income market exposure by investing in Treasuries, agencies and mortgage securities in addition to corporate bonds. We estimate that corporate bonds account for 41% of IG bond fund and ETF AUM, of which 34% is passively managed."