Wall Street adjusts credit forecasts due to market turmoil

Wall Street credit analysts have revised their forecasts, predicting wider credit spreads due to recent market turmoil. Major firms like Barclays and Goldman Sachs have adjusted their estimates, citing increased risks from tariffs and recession fears. Barclays now expects high-grade spreads to reach 125 basis points and high-yield spreads to hit 425 basis points in the next six months. This marks a significant increase from previous forecasts, reflecting a shift in market conditions. Analysts note that current spreads are not adequately pricing in recession risks, which they estimate should be around 20%. Despite the challenges, credit fundamentals remain solid, with substantial new debt issued in March.