The recent turmoil in the government bond market may spell good news for corporate credit. Analysts claim it is the market’s improving confidence in the US economy that has driven the sharp increase in Treasury yields.
Ed Marrinan, credit strategist at JPMorgan, says: “On balance, this shouldn’t trouble investors. What’s happening in Treasuries is a sign of healthier credit fundamentals.”
Investment-grade corporate spreads did widen a few basis points in the two week period following