US growth concerns resurface, Goldman Sachs favors Asian investment grade bonds again

Due to concerns about the US economy and expectations of the Federal Reserve turning dovish, Goldman Sachs has once again favored investment-grade US dollar bonds in Asia over high-yield bonds. "With concerns about US growth resurfacing and valuations higher than at the end of 2024, we believe now is the time to switch back to overweighting Asian investment-grade bonds rather than high-yield bonds," wrote bank strategists Kenneth Ho and Sandra Yeung in a report. This marks a return to the bank's stance earlier this year on this asset class. After Trump announced global tariffs leading to a drop in credit spreads, the bank had shifted to a neutral position in May. This return to a more cautious attitude reflects renewed concerns about the momentum of US economic growth following unexpectedly weak recent employment data.