Soaring bond yields ‘not even close’ to cooling red-hot US economy, investors say

Rising bond yields typically signal tightening financial conditions, yet investors’ view that these increases are insufficient to cool the US economy suggests persistent inflationary pressures and robust growth. For middle-market credit professionals, this dynamic implies continued risk of higher borrowing costs without the expected economic slowdown to ease credit stress. The disconnect between bond market moves and economic momentum underscores the need for vigilance in underwriting and portfolio management amid potentially sustained elevated rates and credit spreads.