Edward Marrinan, macro credit strategy desk analyst at SMBC Nikko Securities America, added: "Credit risk at this point is mispriced."
The move prompted a sell-off in equities and slight widening in corporate credit spreads.
The average investment-grade bond spreads as of on Thursday were just a few basis points wider than the tightest levels touched this year in July and 16 basis points tighter from January.
Junk-bond spreads are 98 basis points inside January levels.
"With market consensus now expecting a soft landing, the credit markets are arguably underpricing default risk," BMO’s Krieter said.
Persons:
Brendan McDermid, Cindy Beaulieu, Edward Marrinan, Moody's, Daniel Krieter, Krieter, Marrinan, Manuel Hayes, Hayes, BMO’s Krieter, Shankar Ramakrishnan, Davide Barbuscia, Paritosh Bansal, Jonathan Oatis
Organizations:
NYSE, American Stock Exchange, New York Stock Exchange, REUTERS, U.S . Federal Reserve, SMBC Nikko Securities America, Reuters Graphics Reuters, Investors, Reuters, BMO Capital Markets, London, Insight Investment, Informa, Thomson
Locations:
New York City, U.S