Recent reports reveal that fears of a recession have hit an all-time high among credit investors

A recent survey by Bank of America Merrill Lynch has shown that US credit investors are more anxious than ever about the possibility of a recession. The survey indicates that a significant portion of US credit investors now see a high chance of a recession within the next year. The perceived likelihood of such an economic downturn has spiked to 25%, marking the highest level in the survey’s history. This surpasses the previous record set in July 2016 when 23% of US credit investors were anticipating an imminent recession. According to the survey, the risk of a recession currently ranks as the third most critical concern for credit investors. Geopolitical tensions, particularly the ongoing trade dispute with China, are another major worry for credit investors, claiming the number one spot.

The prevailing unease about a recession is not limited to credit investors. Various warning signals are currently apparent, and a survey conducted last year revealed that 70% of economists anticipate a recession to hit by the end of 2021. In response to these concerns, investors in the credit markets are showing a preference for higher-rated debt, as indicated by the Bank of America survey. Overall, worries surrounding the trade war continue to dominate as the primary concern for all investors.