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Yield Curve Already Prices A Recession
- Greg Peters says the yield curve is already pricing in a recession and current yields feel mispriced.
- He argues risk/reward does not favor chasing higher yields if recession materializes.
CDS Reveal Elevated Near-Term Sovereign Risk
- Peters points to CDS as a direct measure of elevated US sovereign credit risk tied to debt-ceiling debates.
- Investors pay up for short-dated protection and PGIM hedges for persistent political risk.
Avoid False Safety In High-Grade Credit
- Peters warns against hiding out in high-quality corporate credit because everything reprices off US Treasuries.
- He recommends caution: a reprice in the risk-free rate will hit corporate debt too.