A preponderance of data suggests that the economy is headed for one of two outcomes; either economic growth will slow into a recession or will return and stoke the small but growing fire of inflation.
With corporate bond spreads at extreme lows, outcome one would likely cause a major rise in spreads and harm corporate bonds. With corporate bond maturities very long today (often over 20 years), outcome two would likely cause a crash in long-term corporates due to inflation. In other words, long-term corporate bonds essentially have one direction to go: down.
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