Companies have already sold more than $8 billion of US investment-grade bonds this week, and are lining up to sell more than $9 billion more. The sale by the No 2 US brokerage, which was increased to meet demand, came amid growing market sentiment that the Federal Reserve will refrain from raising interest rates when it meets later this month.

"There have been some recent economic statistics that may have indicated to the investment community that we may see some cooling in the US economy, and that as a result we may be closer to the end of the increasing interest rate environment," said Alex Frank, Morgan Stanley's global treasurer. As a result, he said, "it would be reasonable to conclude that this sentiment has increased the interest of investors in this kind of offering."

Investment-grade corporate bond issuance this week looks sure to dwarf issuance in the week ending May 19, when companies sold $10.7 billion. The bank and finance sector alone is expected to account for nearly $10 billion. Observers said corporate treasurers are taking advantage of the growing conviction that the Fed's six interest rate hikes over the last year may finally be slowing US economic growth to a rate the central bank views as sustainable.

"The real contributor was last week's employment number," said Carl de Jounge, vice president in global credit research for Deutsche Banc Alex. Brown, referring to data showing a decline in May employment, after accounting for workers hired temporarily to help conduct the census.

"We've had a rough few months, there was a lot of pent-up demand, and all of a sudden the tone shifted dramatically."

Rising interest rates erode the value of fixed-income investments like bonds. For much of this year, rising rates have made it more costly for companies to sell bonds, and at the same time made investors less comfortable owning them.

This month, though, corporate bond prices have surged, providing investors with a total return of 1.113 percent in just three trading days, a Merrill Lynch & Co. index said. Before June, corporate bonds were in the red. For the year, Merrill Lynch said, they have gained 0.846 percent.