Goldman Strategists Warn Credit Investors Risk ‘Double Whammy’
- Says investors may face risk of wider spreads, higher rates
- Central banks are tightening policy to combat faster inflation
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Goldman Sachs Group Inc. is revising up its forecast for credit spreads, saying risk premiums are set to build as central banks withdraw stimulus and slower economic growth impacts corporate profitability.
The Wall Street bank expects yield premiums on investment-grade dollar notes to hit 140 basis points by end-2022, compared with a previous forecast of 123 basis points. According to a Bloomberg index of corporate investment-grade securities, spreads were at 123 basis points on Wednesday. For euro credit, it also sees an increase.