Bond investors hungry for yield have pushed further and further into high-risk territory and Pimco sees five warning signals that credit markets are getting overly frothy.
“The lower reaches of the credit market have become particularly stretched,” Christian Stracke, global head of Pimco‘s credit research group, said in a note last week. “High yield has become not-so-high yield, with credit spreads almost back to 2007 levels in many cases.”
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