Everyone is struggling with allocations to a fixed-income market that seems exceptionally over-priced. Cash rates remain near zero, and the 10-year Treasury yield—at 1.65%—sells at a 61x P/E multiple for a coupon without any growth! Moreover, junk-yield spreads are near record lows, and investment-grade credit spreads are at their tightest levels in at least 20 years. Finally, it’s a pretty good bet that yields are headed higher in the next few years.
May
20
2021
“How Low” Could Credit Spreads Go?
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![James Paulsen / Chief Investment Strategist](https://leuthold.imgix.net/leutholdgroup.com/site_files/authors/DSC_2988_LR_Jim.jpg?h=150&w=150&fit=crop&fp-y=.15)