HYG: Ultra-Low Junk Bond Credit Spreads Point And Rising Recession Risk Recreate 2008 Setup

  • The bond market is facing increased pressure, with long-term Treasuries experiencing significant duration risk due to a potential rise in inflation and lower international demand. HYG's credit quality signals high risk, given that B and BB corporate bond credit spreads recently hit their lowest level since early 2007. Economic indicators suggest a consumer-driven recession, with tariff-related inflation and high government debt limiting the options for stimulus.