Watch credit for the bottom. It will tell you when we are getting to the kind of economic accident that the Trump administration seems to want. Morgan Stanley.
This week’s tariff announcements were more hawkish than expectations and raise recession risks, unless met by negotiations in the very near term. We expect no cuts from the Fed this year as inflation firms, an under-appreciated risk for credit.
Softening growth with a lack of easing keeps the set-up challenging, similar to 2015/2018 (both periods saw spreads materially wider than current levels).