Corporate debt levels hit unprecedented levels!
In stark contrast, default rate are subdued …
Financial conditions is a major driver of low default rate
When will the Fed’s monetary stance be restrictive?
The impact of the deceleration in US growth on investor appetite is the clue. We do not expect the change in financial conditions to be linear.
GDP stagnated in the first quarter of 2015. The weather does not explain the entire situation. The dollar’s appreciation has an impact on activity that is comparable to a tightening of monetary conditions. Should we fear the end of the cycle? In terms of profi ts, yes, but in terms of economic activity, it is still premature.
Head of Macroeconomic Research
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
CFA, Credit Strategy