Credit Market Rally Losing Steam

June 24, 2024

Credit Market Rally Losing Steam Photo

The meteoric rise in Nvidia has understandably overshadowed every other market news story this year, including the U.S. credit markets’ impressive run. With the Federal Reserve still committed to rate cuts at some point this year, yield-hungry investors have helped drive credit spreads close to the tightest levels during the past 25 years.1

Recently, credit markets have started to show signs of fatigue with spreads beginning to move wider since the beginning of June.2 While the move is not enough to signal trouble ahead yet, tightening credit conditions have historically been a precursor to broader stress across financial markets.

The Presidential debate on Thursday night is likely to dominate the financial news headlines with this week’s economic calendar relatively light.3 The most important economic data point arrives Friday with the release of May’s Personal Consumption Expenditures (PCE) Index.4 Another favorable inflation print is likely to keep a September rate cut on the table.




2Yahoo! Finance – Credit’s Strong Run Stumbles for First Time This Year; 6/22/24

3NPR – Biden and Trump will debate on Thursday. Here’s what you need to know; 6/24/24

4MarketWatch – U.S. Economic Calendar; as of 6/24/24

Tags: Credit markets | Bond markets | PCE | Personal Consumption Expenditures Index | Federal Reserve | Inflation

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