Goldman Sachs Strategist: US Credit Market's Potential Spread Risk Is Concerning

```htmlJinse Finance reported that on June 5, Goldman Sachs stated that strong demand from pension funds and insurance companies will support corporate bonds, shielding them from macroeconomic headwinds and record issuance volumes. "Although the situation has undoubtedly become tougher, spreads have narrowed to pre-war levels," Goldman Sachs Chief Credit Strategist Amanda Lynam said on the Bloomberg Industry Research Credit Edge podcast. "This is the unsettling and tense state of the credit market right now." In addition to rising fuel and other input costs caused by the Iran war, U.S. companies also face high inflation, rising debt financing costs, consumer pressure, and the risk of slowing U.S. economic growth. Meanwhile, the supply of investment-grade bonds is expected to reach a historic peak this year. Goldman Sachs estimates that pension funds and insurance companies hold more than $6.4 trillion in U.S. dollar corporate credit bonds, accounting for about 40% of the market. Lynam noted that corporate pension funds' funding levels have reached the highest point since 2007 and may increase their holdings of high-quality credit bonds. She also pointed out that the allocation ratio of insurance companies to fixed income assets is 10 percentage points lower than the 2010 level, indicating they still have room to increase holdings.```