Market Update: Credit Spreads Reach Historic Lows
Despite tariff-related concerns causing turbulence in other asset classes, the cost of borrowing for top U.S. corporate bonds has dropped to its lowest level since 1998. According to the latest data from ICE BofA, investment-grade spreads are now only 0.73 percentage points above Treasuries.
Strong Demand Drives Corporate Bond Market
Investor appetite for high-quality corporate debt remains robust, with many market participants prioritizing credit stability over potential volatility. James Vokins of Aviva Investors notes that demand for these bonds has reached near-historic extremes.
Outlook and Potential Risks
- Will the market sustain these ultra-low spreads?
- How will global economic shifts affect U.S. credit?
- Is it time for investors to reconsider portfolio allocations?