Search Results for: credit spread

Volatility – IG Credit Spreads vs. VIX IG credit spreads could suggest that VIX should be at 20. Image: BofA

Credit Spreads and U.S. Labor Market Despite the Fed’s support, credit spreads remain above their pre-COVID-19 levels and may be taking a cue from the U.S. labor market. Image: Morgan Stanley Wealth Management

VIX vs. IG Credit Spread and S&P 500 This chart shows that the VIX has realigned with the IG credit spread, but not with the S&P 500. Image: Deutsche Bank

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“