Macro Pulse U.S.: Weakest Credits Flash a More Selective Market Signal
CCC spreads have widened relative to BBs, pointing to rising pressure on the weakest credits even as higher-quality risk remains well supported, suggesting investors are demanding more compensation for weaker business models and in appropriate capital structures.
In the latest 3 Things in Credit, KBRA’s Chief Markets Strategist Van Hesser weighs the deflationary forces that could temper inflation risk, explains why a significant turn in the credit loss cycle is not our base case, and examines why CCC spreads are flashing a more selective warning signal.
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