A big question at Federal Reserve headquarters this week is when the central bank will start lowering interest rates. That said, interest rates have already been falling on some types of debt — including mortgages, government bonds and corporate debt. 

Big companies typically issue debt to finance projects like expansions, new hiring and mergers. The average yield on new, investment-grade corporate bonds is almost a full percentage point below where it was in November, according to the research outfit CreditSights. And that’s caused activity in the corporate bond market to heat up.

January is usually a busy time in the corporate bond market, when treasurers are thinking, new year, new me, new debt on the balance sheet. But Winnie Cisar, global head of strategy at CreditSights, said this January has been unusually busy because there’s a lot of demand for corporate debt.

“We always say that supply follows demand. And demand is very strong, which means corporate issuers are going to take advantage of that.”

One big reason demand is up is that investors are more optimistic about the health of big companies. That’s important, Cisar said, because corporate bonds are generally viewed as riskier than government bonds.

Lately, we’ve seen signs on many fronts that the economy is doing better than expected. “For corporate earnings growth, for the state and resilience of the consumer,” Cisar said.

And since corporate bonds seem less risky now, their yields have been falling.

Many bond buyers might feel now is a good time to enter the market because they expect yields to fall further once the Federal Reserve starts cutting rates.

“So I think there are a lot of investors looking at current yields and saying, ‘Hey, this might be the last hurrah, this is my last opportunity before the Fed starts cutting,'” Cisar said.

Companies have plenty of other reasons to issue new debt. Drew Pascarella, who teaches finance at Cornell University, said a lot of bonds issued in January came from banks that wanted to raise capital so they can lend more to businesses.

“Companies looking to borrow money to make investments and grow their companies, and the banks want to be ready for that,” Pascarella said.

The bond issuers themselves might be loading up on debt to expand too, he added. “Companies may look to finally build that factory or finally hire those people that they’ve been holding off on.”

Pascarella said bond market participants he’s talked to recently think the market will stay busy past January. “The view there is that this activity will sustain at least through February and March. Perhaps further,” he said.

Especially, he said, if the economic backdrop stays strong.