Credit Demand Looks Strong into 2025: Real Yield

The transcript discusses the strong demand for investment grade funds since November 2023, highlighting the optimistic outlook for yields and credit spreads into 2025. It explores the relationship between equity bear markets and credit spreads, noting that a significant equity downturn is needed to pressure high yield markets. The discussion also covers how issuers have more options, making the credit market a less reliable economic indicator. The large equity cushion is seen as providing substantial support to the credit market.

What has been the trend in investment-grade fund flows since November 2023?

• Constant inflows

• Only three weeks of outflows

• No significant change

• Consistent outflows

What is considered necessary for credit spreads in the high-yield market to come under significant pressure?

• A rise in interest rates

• A broad-based equity bear market

• Increased foreign investment

• A decrease in inflation

How does the current role of credit markets as economic indicators differ from the past?

• They have remained unchanged

• They are more reliable now

• They are less of an indicator now

• They are more volatile now

What has been the trend in equity values over the past 14 months?

• A rise of 10-20%

• A decline of 10-20%

• A rise of 40-50%

• No significant change

What provides substantial support to the credit market according to the third section?

• High interest rates

• Large equity cushion

• Low inflation rates

• Increased government spending