IG Credit Strategist: Rates and stocks

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IG Credit Strategist: Rates and stocks

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IG Credit Strategist

Rates and stocks

Rates and stocks 15 May 2026

S&P 500 is near all-time highs, and 30yr Treasury yield reached the most elevated level Credit Strategy

since 2007 on Friday May 15. While this configuration is potentially unstable in the near United States

term, ultimately it is supportive of IG spreads in longer term. Higher equity valuations

reflect a strong earnings outlook, and not just for the hyperscalers. They also lower the

loan to value ratio (debt to EV) for corporate bond issuers.

The elevated yields are certainly good for demand. In the near term, another leg higher

in rates could again weigh on fund flows, while a jump in rate vol could lead to less

institutional demand as well. Still, since the start of the Iran war, spreads have been very Yuri Seliger

resilient to the rate volatility, and we look for that to largely continue going forward. Credit Strategist BofAS

+1 646 855 7209

yuri.seliger@bofa.com

Sohyun Marie Lee

Hyperscaler supply is global CreditBofAS Strategist

News reports suggest that Amazon and Alphabet are looking to borrow in CHF and JPY +1sohyun.lee@bofa.com646 855 7217

corporate bond markets. We expect slower supply in 2H, and pushing more into other See Team Page for List of Analysts

currencies leaves even less for USD market. Non-USD IG is 34% of the total. Assuming

the same share for hyperscaler supply implies $115bn for 2026, vs $107bn issued YtD.

Higher inflation is good for spreads Recent credit strategy research

April CPI surprised to the upside. Our economists are now tracking +3.3% YoY core PCE Publication Name

for April - the highest since 2023. For now, higher inflation is translating into higher Situation Room Situation Room: Another