Credit Regime: Nirvana, With a Warning From the Lower DecksThe ballpark is full. The beer is cold. Everybody in the good seats is having a wonderful time. But if you walk down toward the bleachers behind the bullpen, a few people are starting to look unsteady on their feet.
That is where credit stands this week.
The broad ICE BofA U.S. High Yield Index option adjusted spread finished July 23 at 277 basis points, up modestly from 273 the week before. That is nothing. It remains well south of our 350 basis point line between Nirvana and Caution, and nobody in the high yield market is pricing in a recession.
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