KPMG Economist Hunter Fears Credit Is on Precipice of Wider Spreads

The video discusses the market's response to a recent Fed rate cut, noting that the anticipated stress in credit spreads has not yet materialized. It explores the potential for wider credit spreads and the implications of 'fallen angels'—bonds that may be downgraded to high yield. The discussion highlights the importance of economic fundamentals and sector performance in determining the severity of any credit crisis. The video concludes that while current market reactions are stable, underlying economic changes could lead to significant challenges.

What does the speaker mean by 'fallen angels' in the context of credit spreads?

What conditions does the speaker believe need to change for a credit crisis to occur?