The end of monetary tightening, declining inflation and still-robust growth will likely allow spreads to remain within the tight end of their recent range. Goldman Sachs Research’s view for 2024 centers on three ingredients: 1. Modestly tighter spreads and modestly lower yields translating into lower excess returns but higher total returns vs. 2023; 2. A balanced supply/demand technical backdrop; and 3. Rising financial distress in the low end of the quality spectrum that is to some degree priced in.
