ICE BofA spreads: off the April wides

ICE BofA US investment-grade OAS was [0.89 on Jun 3-4]fred.stlouisfed.org, down from [1.21 on Apr 9]fred.stlouisfed.org, while BBB was [1.12 on Jun 3]fred.stlouisfed.org and high yield had already retraced to [3.09 on May 13]fred.stlouisfed.org from [4.61 on Apr 7]fred.stlouisfed.org. Based on current levels, that says the April shock has mostly been unwound; a move back toward the April highs would flip the read from normalization to renewed macro stress.

ICE BofA US investment-grade OAS was [0.89 on Jun 3-4]fred.stlouisfed.org, down from [1.21 on Apr 9]fred.stlouisfed.org; BBB was [1.12 on Jun 3]fred.stlouisfed.org versus [1.49 on Apr 9]fred.stlouisfed.org, and high yield had already retraced to [3.09 on May 13]fred.stlouisfed.org from [4.61 on Apr 7]fred.stlouisfed.org. That is the tape: April's tariff shock blew spreads out, and the market has since taken back a lot of that widening without much help from rates, with fed funds still at [4.33]fred.stlouisfed.org and the [10-year Treasury at 4.46 on Jun 2]fred.stlouisfed.org. Based on current levels, what is priced is a benign default backdrop, orderly funding, and enough demand to absorb supply; the beat is more compression toward the [0.79 low on Feb 18-19 in IG]fred.stlouisfed.org or the [0.98 low on Feb 18 in BBB]fred.stlouisfed.org, while the miss is any move back toward [1.21]fred.stlouisfed.org, [1.49]fred.stlouisfed.org, or [4.61]fred.stlouisfed.org. If conditions hold, a print outside that range changes the read from post-shock normalization to renewed macro stress.