This Goldman Sachs Exchanges podcast episode discusses the recent rise in corporate bond spreads in the US. Host Allison Nathan interviews Chief Credit Strategist Lotfi Karoui, who explains that this spread widening, while seemingly resilient compared to equity market performance, is actually in line with the S&P 500's decline since February. Karoui attributes this to increased policy uncertainty and higher volatility, leading to a gradual rebuild of risk premiums. He suggests that while fundamentals remain strong, the forward-looking signal is negative, justifying the spread increase. The conversation also touches on the relatively better performance of European credit markets and the potential for further spread widening in the US, though not to recessionary levels.
