BlackRock's Keenan: Credit Market Adjusting for Growth Pickup

The transcript discusses the current state of the market, highlighting increased conviction in near-term growth due to vaccine rollout and economic stimulus. It notes the market's adjustment to expected GDP growth and the potential for upside. The conversation also touches on the tightness of financial markets, questioning whether the exuberance is justified. It concludes with an analysis of spreads and the expected returns from high yield loans and bank loans over the next year.

What factors are contributing to the market's increased confidence in near-term growth?

• Rising interest rates and inflation

• Vaccine rollout and stimulus from the new administration

• Decreasing oil prices and trade agreements

• Increased consumer spending and tourism

What has been the impact of the vaccine rollout on the market?

• It has accelerated market confidence and growth expectations

• It has increased market uncertainty

• It has slowed down market growth

• It has had no impact on the market

How has the market situation changed from last year to now?

• From expansive to restrictive

• From bleak to tight

• From tight to loose

• From stable to volatile

What is a potential downside of the current market spreads?

• They are too wide

• They are not supportive of growth

• They offer limited upside due to asset convexity

• They are too volatile

What is the expected return from high yield loans over the next several months?

• 1-2%

• 3-4%

• 4-5%

• 6-7%