Bonds
Credit Likely to Stay Pricey for Months, Barclays Says
- Valuations are high, but demand for the debt is strong
- Macro and rate risks could change the equation, bank says
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If history is any guide, investment-grade US corporate bonds can stay at current nosebleed valuations for months more.
That’s the conclusion of Barclays, which said that the present macro environment, and companies’ overall financial health, are similar to the period from 2004 through 2006, when the economy was growing at an annualized clip of over 3% and the Federal Reserve was hiking rates, ultimately stopping at 5.25%.