Are Credit Spreads Recent Tightening a Sign of a Trend?

The tightening and widening of credit spreads can really wreak havoc on income markets.

A credit spread is the difference in yield between a U.S. Treasury bond and another debt security of the same maturity but different credit quality.

What really drives widening/tightening: perception in the change of credit quality or liquidity.

So how have credit spreads looked this year:

Spread duration - moves due to spread widening and tightening - can be determined by the length of the security. The shorter the time frame to maturation, the less of potential impact on duration. Maybe some of the longer-term fixed income securities are starting to benefit from this recent tightening we have seen.

As of 8/11/2022	7-Day	1-Month	3-Month	6-Month
US Aggregate	-1.19%	1.04%	0.31%	-5.98%
MBS Index	-0.92%	1.66%	1.12%	-4.43%
Municipal Bond Index	-0.35%	1.27%	3.52%	-3.65%
HYG	-0.25%	5.47%	3.19%	-4.84%
LQD	-1.43%	2.30%	1.42%	-8.93%

Let's hope it is a trend.