Schroder upgrades global corporate bond ratings to “neutral” and cooling the risk of a US recession is the key

The Zhitong Finance App learned that Schroder, one of the world's largest asset management giants headquartered in the UK, raised the global corporate bond outlook from “negative” to “neutral” on Wednesday and maintained an optimistic view of the global stock market as it anticipated that the risk of a recession in the US economy would decrease.

The British asset management giant raised its ratings of US investment grade bonds and high-yield bonds from “negative” to “neutral” based on stable economic growth, rising demand, and positive consumer confidence data.

According to information, in May of this year, Moody's downgraded America's sovereign credit rating, and Trump's tariff policy caused fluctuations in the benchmark US debt, which in turn boosted corporate bond yields. According to J.P. Morgan Chase data, the scale of US junk bond issuance reached 28.9 billion US dollars in May, a record high for a single month since September 2024.

Meanwhile, Schroder said that “the biggest risk” of US investment-grade bonds “seems to have passed,” but pointed out that overall, domestic corporate bond valuations are still high. “The market can now pay more attention to positive factors such as regulation and government spending,” the agency added.

According to data from the US Treasury Department at the beginning of this month, the size of US debt held by foreign investors declined slightly from an all-time high in April.

The asset management company also reiterated its positive attitude towards global stock markets, including US stocks, while maintaining a negative outlook on the US dollar. “Despite ongoing economic uncertainty, we believe the downside risk is manageable and the possibility of a recession this year is low,” the analyst added.