KBRA Releases Research – The Forward Look—U.S. Credit Insights: Q3 2025

KBRA releases its quarterly report highlighting our Chief Strategist Van Hesser’s view on key economic indicators, as well as what he identifies as the most influential factors driving credit markets in the upcoming quarter. The report also examines credit market valuations in the context of current and future market conditions.

Key factors driving credit market conditions in Q3 include a better sense of the cost of tariffs, which should filter out through forward guidance accompanying Q2 earnings reports; renewed appreciation of U.S. exceptionalism, evident in still high corporate margins and product innovation; and guardrails that effectively reduce policy uncertainty coming out of Washington. This KBRA report also adds perspective on current valuations in credit markets, which have benefited from the administration’s willingness to negotiate trade policy, as well as the still strong balance sheets in the aggregate of consumers and businesses. That said, our base case calling for modest stagflation over the near term will test credit markets priced near perfection.

Click here to view the report.