Junk Bond Spreads Hit Post-Tariff-Shock Highs as Treasury Yields Rise

A sell-off in US Treasuries has pushed borrowing costs higher across the bond market, and the pain is concentrated in the weakest corporate borrowers. The Financial Times reported that spreads on the riskiest junk debt, the extra yield investors demand over safe government bonds, have climbed to their highest level since the meltdown that followed last year's tariff announcement. Wider spreads mean it costs more for financially fragile companies to refinance debt, which raises the risk of defaults if the trend continues. The move also reflects growing investor unease about how much higher bond yields the stock market can absorb before valuations come under real pressure. What is unresolved is whether this is a temporary repricing tied to a specific bout of Treasury selling, or the start of a longer credit-tightening cycle. The answer will show up first in how the weakest borrowers fare when they next try to roll over debt.