Credit Markets

February 2017

We are familiar with the stock market, but less familiar with the credit market. However, the credit market dwarfs the stock market in transactions and in market value. Trillions of dollars are traded on the credit markets each week. In a nutshell, credit markets are generally trade government and corporate bonds. If you are a believer in wisdom of the crowd, you will closely follow the credit markets. Depending on the demand for a particular bond interest rates will fluctuate and reflect the thinking of the market participants. For example, if the crowds are thinking that a recession is around the corner they will pile into bonds driving the rates down. Anyone following the credit markets will quickly be aware of what the general feeling of consumers are.

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