“All’s Well That Ends Well”

John Lekas – CEO & Senior Portfolio Manager

April 23, 2025

Credit markets and global interest rates remain relatively firm, reflecting a cautious but stable risk environment. We believe volatility will continue in equity and fixed income markets, but the fundamentals remain intact. Per the chart below, spreads have widened over the past month but are well within historic averages:

High-yield credit (HYG): The current spread is 431.03 basis points, with a low of 314.10 and a high of 528.62 (1yr).

Investment-grade credit (LQD): The current spread is 173.66 basis points, with a low of 141.84 and a high of 205.82 (1yr).

Credit Spreads*

Global Overnight Interest Rates (as of April 2025)

Since last November, we’ve been saying that the Trump Administration is promoting a weak dollar policy to help exports and a more competitive posture. That’s playing out. This points more toward inflation rather than recession.

The weak dollar will move treasury yields higher, particularly from foreign investors who will demand higher rates due to a lower dollar. While recent volatility has rattled markets, the economic backdrop remains intact.

*Source: Bloomberg. The views and statements expressed herein are those solely of Leader.

Additional interest rate data sourced from: Trading Economics, “Central Bank Interest Rates.” TradingEconomics.com, April 2025. https://tradingeconomics.com/country-list/interest-rate

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