Credit Outlook: Credit Spreads Follow VIX Wider
- By John Tierney
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- 4 min read
Summary
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- High yield credit spreads finally went our way recently, widening some 40bp as Treasury yields jumped 60bp.
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- Contrary to what many observers seem to think, we show there is no link between Treasury yields and corporate credit spreads.
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- We attribute the widening primarily to higher equity volatility, as the VIX rose from 13% to 19%.
Summary
-
- High yield credit spreads finally went our way recently, widening some 40bp as Treasury yields jumped 60bp.
-
- Contrary to what many observers seem to think, we show there is no link between Treasury yields and corporate credit spreads.
-
- We attribute the widening primarily to higher equity volatility, as the VIX rose from 13% to 19%.
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