A Whiff of Stagflation

Andrew Sheets, head of corporate credit research at Morgan Stanley, discusses the potential impact of tariffs on the market. While markets have shown resilience so far, he suggests recent data indicating rising inflation and slowing job growth might signal the beginning of stagflation. He predicts that the next few months will be more challenging, potentially leading to modest spread widening in credit markets, despite credit's attractive yields and generally good corporate performance. He concludes that the market may take a breather due to this shift in economic indicators.