Economics
Fed Rate Hikes Are Pushing Credit Market Toward Dysfunction, Bank of America Says
- Credit stress is nearing ‘critical zone,’ strategists say
- Fed needs to slow down hikes or face difficult fixes, they say
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The Federal Reserve needs to slow the pace of rate hikes to prevent credit market dysfunction, warned Bank of America Corp. strategists.
Distress, dispersion and debt-to-enterprise-value ratios were all above June highs, pushing the bank’s measure of credit stress to a “borderline critical zone” this week, strategists Oleg Melentyev and Eric Yu said.