Fixed Income Asset Allocation Insights: If Credit Spreads Widen, Look to Add Risk
In recent years, demand for US dollar investment grade credit has grown worldwide. Many investors have been drawn to this market by the attractive yield differential, large and diverse opportunity set, and absence of foreign exchange volatility.
The outlook for the US economy, with anticipated pro-growth fiscal and regulatory policy, should support US dollar strength and higher yield differentials, which we expect will continue to fuel demand for US dollar investment grade credit.
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