Yes, agreed. The market isn’t pricing ‘higher for longer,’ which may be what Dimon et al are trying to get in front of in their recent ‘messaging’?
Patrick Saner head of macro at SwissRe notes on twitter this morning:
“Credit spreads do not currently price a recession”
“In fact, even when conditioning only on non-recession periods, B-rated corporate bond spreads are at their median level vs. their history since 1987.”
“Either way, credit spreads haven’t historically been a consistent leading indicator of the business cycle.”
“The exception are CCC spreads which are most growth sensitive - but even there spreads are tighter now than they were at the start of the year.”
Yes, agreed. The market isn’t pricing ‘higher for longer,’ which may be what Dimon et al are trying to get in front of in their recent ‘messaging’?
Patrick Saner head of macro at SwissRe notes on twitter this morning:
“Credit spreads do not currently price a recession”
“In fact, even when conditioning only on non-recession periods, B-rated corporate bond spreads are at their median level vs. their history since 1987.”
“Either way, credit spreads haven’t historically been a consistent leading indicator of the business cycle.”
“The exception are CCC spreads which are most growth sensitive - but even there spreads are tighter now than they were at the start of the year.”