PLW - Early-Cycle Conditions Still Support Credit

• Why the run-up in rates has troubled equity markets more than credit, and why we think that is poised to continue.
• Since the start of the fourth quarter of 2020, the U.S. 10-year yield has risen by more than 80 basis points while the spread of the ICE Bank of America U.S. Corporate BBB Index has tightened by more than 60 basis points.
• We still anticipate higher but contained inflation during 2021, and while we caution that the risk is heavily skewed to the upside, we maintain our outlook for the U.S. 10-year yield to finish the year well inside of 2.00%.

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