One of Trump’s top ambitions was to bring economic growth back above 3% over the long term. However, it looks like the United States’ position in the credit cycle (record corporate debt and significant household use of consumer credit) will thwart these plans.
Bastien Drut & Valentine Ainouz
Strategy and Economic Research at Amundi
US credit markets have delivered a strong performance since mid-February 2016: for example, HY spreads tightened massively, on average from a peak close to 900 b.p. to a low of 355 b.p. one year later, while now spreads
Strategy and Economic Research at Amundi Milan
Historical empirical evidence shows that credit spreads tend to peak at the end of recessionary periods. Then, credit recovers with rising government bond yields: recovery means improving credit metrics through an increasing cash flow generation. Did it work also in the present cycle?
Valentine AINOUZ, Sergio BERTONCINI, Bastien DRUT