U.S. IG Credit Spread and S&P 500 vs. Citi U.S. Economic Surprise Index Chart suggesting that since mid-May, the rally has been driven by positive macroeconomic factors. Image: BofA Global Research
Credit Spreads on High-Quality U.S. Corporates Credit spreads on high-quality U.S. corporates are widening and are flashing a warning sign for markets. Image: Gavekal, Macrobond
U.S. High Yield Credit Spreads and Recessions Chart suggesting that there is little recession fear baked into U.S. high yield credit spreads at the moment. Image: J.P. Morgan
A Widening of High Yield Credit Spreads Is Very Useful to Predict a Recession Like a yield curve inversion and real interest rates above real GDP, a widening of high yield credit spreads is very useful to predict a recession. At the present time, the bond market is not concerned about credit risk.
High Yield Credit Spread and Move Index Does higher rate credit volatility imply a widening of high-yield spreads? Image: Quill Intelligence, LLC
U.S. Recession Probability Based on Credit Spreads and Treasury Spreads This chart suggests that the recession probability is low, about 10% based on credit spreads. Image: Charles Schwab
U.S. High-Yield Credit Spreads High-yield credit spreads are still below recession level (red line). A widening high-yield spread remains a useful indicator for predicting a coming recession in the current interest rate environment. You may also like “A Widening of Credit Spreads Is Very Useful to Predict a Recession“
Credit Risk – U.S. BBB Spreads Outside of GFC and the Great Depression, U.S. BBB spreads have never been higher. Image: Deutsche Bank
S&P 500 and Investment-Grade Spreads The S&P 500 tends to move together with investment-grade spreads. Image: Credit Suisse Research
U.S. 10-Year/2-Year Yield Spread vs. Fed Funds Target Rate Interesting chart showing the U.S. 10Y-2Y yield curve steepness versus. the Fed funds target rate (inverted). Image: Credit Suisse