Navigating credit markets in 2026: “Don’t let the macro narrative overwhelm the micro”

Credit markets are undergoing a fundamental transformation as they converge with rates and equity markets, characterized by increased electronification and continuous price discovery. Investment-grade and high-yield bond turnover has reached multi-year peaks, enabling more efficient risk management. Macroeconomic volatility, driven by divergent fiscal and monetary policies, complicates traditional duration strategies, making foreign exchange a more precise vehicle for expressing policy views. Simultaneously, the massive capital requirements for AI infrastructure are reshaping issuance patterns, leading to periodic market indigestion and potential concentration risks. Ben Kinney, J.P. Morgan’s Head of Credit Sales, emphasizes that while credit remains a micro-driven market, participants must adapt to these macro-influenced dynamics and leverage modern portfolio tools to navigate the evolving landscape of liquidity and supply.