Are credit spreads wide enough?
Paul Jackson. Global Head of Asset Allocation Research and András Vig. Multi Asset Strategist
Have credit spreads widened enough? We think the answer depends upon what happens to the economy and we use US credit markets to give historical context. This leaves us more concerned about high-yield than investment-grade but we believe spreads could still widen in both.
As is often the case during recessions, credit markets have received a lot of attention. Spreads have widened and liquidity has been difficult at times (according to my trader colleagues). So, how bad has it become and what does the credit market tell us about the state of the economy?
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Important information
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The opinions referenced above are those of the authors as of 5 April 2020. Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.
