FICC Focus FICC Focus Special: High Yield Outlook
Dec 22, 2025
Winnie Cisar, Global Head of Strategy at CreditSights, John McClain, Global Co-Head of High Yield at Goldman Sachs Asset Management, and Meghan Robson, Head of U.S. Credit Strategy at BNP Paribas delve into the high-yield market outlook. They discuss spread widening and consumer health, with Meghan highlighting K-shaped risks. John shares his sector preferences, favoring non-bank financials, while Winnie emphasizes media over leisure. The panel also explores the impact of private credit on public markets and shares can't-miss trades for 2026.
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Wider Spreads From Eroding Fundamentals
- Winnie Cisar expects spreads to widen and yields to rise as fundamentals erode, especially labor, consumer and defaults.
- She sees Fed cuts becoming more aggressive, forcing spreads to recalibrate to higher perceived credit risk.
Complacently Optimistic Market With Wide Range
- John McClain calls the market 'complacently optimistic' with strong fundamentals but risky technicals and tight valuations.
- He expects a wide range in spreads next year and recommends dynamic, defensive positioning.
Prefer Established Nonbank Financials
- Favor nonbank financials where banking competition is limited and underwriting has withstood cycles.
- Differentiate within the sector and prefer companies with proven cycle experience.