Junk Bond Market Is Signaling the US Will Avoid a Recession
- Spreads are close to median for non-recessionary periods
- The bonds notched biggest one-month gains in July in a decade
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The US junk bond market is forecasting that the economy may weaken, but won’t tip into a recession.
It comes as Federal Reserve officials vow to continue to fight inflation aggressively, even if higher rates increase the risk of recession. And some strategists and money managers think credit markets aren’t paying enough attention to how bad the potential upcoming downturn could be.