Original title: JPMorgan Revises Junk Spread, Yield, Returns Target for 2025
Strong and resilient fundamentals, robust demand, limited new supply amid expectations of a US rate cut as early as this month have all led JPMorgan to revise its target for spreads on junk bonds, their yield, returns and supply for 2025. After boosting the supply outlook Bloomberg Terminal for high yield bonds to $300 billion, from $225 billion, JPMorgan strategists revised their spread target to 375 basis points from 450. For high yield bonds, that would suggest a yield of 7.5% and a full-year return of 7.5%. This revised forecast incorporates a year-end five-year Treasury yield of 3.65%