Bond yields often broadcast a pulse on global economic and geopolitical events long before the equities markets! Most market observers are already keeping 10yr Tsy yields on their radar, and of course the 3mth Bills/10yr Tsy spread as the key indicator of curve 'steepness' or 'inversion'. But especially as the Fed starts unloading bonds from its balance sheet, another metric to have front and center on the radar is 'credit spreads'. The chart of the High Yield ETF (HYG) vs the Investment Grade ETF (LQD) is a rough measure, for sure, but noteworthy nonetheless. It's noteworthy that credit spreads have already widened, with the spread on this ETF differential already back to 2019 levels! Ever since the start of Covid when the Fed all but assured the market that they'd underwrite corporate credits in order to avoid Covid-induced defaults, credit spreads have come crashing in, with some companies boasting the title 'zombies' given that they had no cashflow to sustain their debt load! Well, now with the Fed in 'kill inflation and tighten financial conditions' mode, credit matters once again! This is not to say that a credit crisis is over the horizon, but it does suggest that 'risk pricing' is returning to asset pricing! And the more that we see that in bond markets, one can be pretty certain that we'll continue to see it in equity markets.