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Quarter-End Insights

Credit Markets: Investment Grade Struggles, While High Yield Outperforms

Interest rates appear poised to rise further over time as the economy improves, creating an environment in which high yield should continue outperforming investment-grade.

  • Rising rates reduce returns.
  • Corporate credit spreads: investment-grade struggles, while high-yield outperforms.
  • Slow but steady economic growth will support the corporate credit market.
  • Long-term interest rates begin to normalize toward historical norms.