Why Credit Spreads Could Begin To Widen
Source: SeekingAlpha
2025-03-12 14:44:00 ET
Summary
- The yield premium on high-yield bonds versus U.S. Treasuries of similar maturity is just about as narrow as it has ever been in history at only 2.8%.
- When credit spreads widen, they can have large losses for unhedged corporate bond investors.
- Looking ahead, investors may want to ask if the Federal Reserve’s monetary policy is also likely to contribute to a widening of credit spreads.
By Erik Norland
The yield premium on high-yield bonds versus U.S. Treasuries of similar maturity is just about as narrow as it has ever been in history at only 2.8%....
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Why Credit Spreads Could Begin To Widen
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