US Bond Spreads hit Lowest Since 2007

U.S. high-grade bond spreads fell to a 14-year low Friday as investors temper their inflation projections and grow bullish on a reopening economy.

The risk premium on investment-grade debt tightened one basis point to close at 84 basis points over Treasuries, a level last seen in 2007, according to Bloomberg Barclays index data. An accelerating U.S. economic recovery has boosted corporate earnings this year, putting high-grade bonds on track to post positive returns for the second consecutive month following their worst start to the year since 1980.

Reference

Bloomberg, 2021-05-29, “US Corporate Bond Spreads Hit 14-Year Low as Economy Resurges”