Global Credit Ahead of the Curve

The US yield curve has exhibited considerable volatility in 2023, reflecting the fickle nature of investors' macroeconomic expectations and the challenge of predicting interest rate moves. The high volatility has led to increased concerns about a recession and a softer landing for the US economy. However, despite the volatility in the rates market, average yields for US high-yield bonds have remained relatively range-bound, reflecting the resilience of the underlying US economy. Proper underwriting and the ability to dynamically allocate between asset classes are crucial for credit investors in this uncertain environment.