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Spreads signal

The #federalreserve has a very difficult task: control #inflation without creating a #recession. To fulfill that task, the #fed monitors several economic indicators to make sure that its actions are not pushing the economy to the brink. One of the most trusted indicators for that purpose ,according to #bankofamerica global research, is the differential between investment grade bonds and treasury bonds, measured by the #cdx IG spreads index. Over the past 10 years, every time the Index has been around 100 bps, the #fed has paused or pívot its tightening policy. We’re currently near those levels. And the fed is expected to be aggressive in the June 15th meeting with a 50-75 bps #ratehike.

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Source: BoA global research

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