The Credit Edge by Bloomberg Intelligence
JPMorgan Sees Credit Risks Rising as Trade War Bites
Mar 27, 2025
Lisa Coleman, head of global investment-grade corporate credit at JPMorgan Asset Management, shares her insights on rising credit risks amid escalating trade wars. Managing $73 billion in assets, she highlights the deteriorating technicals in credit markets and emphasizes the need for higher returns due to uncertainty. Interesting discussions include the shifting landscape for U.S. companies, investment opportunities in healthcare and consumer sectors, and the evolving sentiment around different asset classes as recession fears loom.
44:17
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Quick takeaways
- Economic uncertainty from escalating trade wars is increasing credit risks, prompting a demand for higher compensation for investment risks.
- The analysis reveals a cautious outlook for corporate earnings growth, with estimated EBITDA growth decreasing amidst pressures from potential tariffs.
Deep dives
Current Market Conditions and Economic Outlook
Economic uncertainty is creating tension in global markets, exacerbated by recession fears and inconsistent US policymaking. Despite the volatility, credit spreads remain tight, indicating a prevailing optimism about the long-term trajectory of the US economy. Market players are optimistic that the new administration will bolster the economy, even as consumer spending declines and businesses hesitate on investments. Bond and loan markets are reflecting low recession probabilities, suggesting an underlying confidence in high-grade borrower stability amidst growing concerns.
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