IG - The Near-Term Outlook For Credit Markets

• For credit markets, the returns just kept coming in 2020 once the Fed stepped in with its strong policy support in late March.
• With strong returns in the fourth quarter, both investment grade and high yield corporate markets in the U.S. ended the year with positive returns over equivalent duration Treasuries.
• Notwithstanding the mild taper tantrum-like behavior we've seen in the last few weeks, corporate bonds spreads have rallied further still in early 2021. This ultimately begs the question for investors: can we really expect more from credit markets going forward?

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