BAMLH0A0HYM2 US high yield spreads hit 372 basis points, the highest level since December 2023.Over the last few days, HY spreads have been rising at the fastest pace since the March 2023 Regional Banking Crisis.
Back then, 3 mid-sized US banks failed triggering a broader market sell-off and forcing the Fed to intervene.
A similar spike in yields took place during the 2022 bear market when the S&P 500 lost 25%.
Now, the spreads are back on the rise as the Yen carry trade unwinds.
Bond markets continue to trade like we are in a crisis.
