US corporate bonds issued by riskier borrowers are sliding as concerns rise that President Donald Trump’s tariffs will knock the American economy.
The spread — or additional borrowing cost relative to US Treasuries — paid by junk-rated US companies has jumped by 0.56 percentage points since mid-February to a six-month high of 3.22 percentage points, according to closely watched index collated by Intercontinental Exchange.
The rise in junk bond spreads, an important measure of perceived risks across US markets, underscores worries on Wall Street that Trump’s aggressive tariffs on America’s biggest trading partners will cool US growth or even tip the world’s biggest economy into a recession.