EDFX data point to uneven credit stress
David Hamilton presents forward-looking probability of default data from Moody's Analytics EDFX model, covering all US-listed companies. The data mirrors historical default trends but adds a forward-looking dimension. A persistent and historically wide gap between all-corporate and high-yield PDs since 2021 reflects the K-shaped economy, with smaller, unrated firms bearing disproportionate credit stress. The data points to gradual improvement ahead but lacks a clear catalyst for a sustained downward trend.