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Quarter-End Insights

Credit Market Insights: Global Rates on the Rise

Global interest rates continued to climb as investors priced in expectations that the global economy is entering a reflationary environment.

  • While long-term global interest rates have generally been rising, the rate of increase picked up substantially in the U.S. following the U.S. presidential election.
  • Strong demand for corporate bonds has helped push credit spreads tighter across all sectors and the average spread of the indexes are now much tighter than their long-term averages.
  • Though most fixed-income sectors have given back many of the gains they generated earlier this year, the high-yield sector had been able to buck the downward trend.
  • After years of downgrades outpacing upgrades, we upgraded the same number of companies as we downgraded in the fourth quarter.