KBRA Releases Research – The Forward Look—U.S. Credit Insights: Q4 2025

KBRA releases its quarterly report highlighting our Chief Strategist Van Hesser’s view on key economic indicators, as well as what he identifies as the most influential factors driving credit markets in the upcoming quarter. The report also examines credit market valuations in the context of current and future market conditions.

Key factors driving credit market conditions in Q4 include improving definition around points of ongoing policy uncertainty, the ability of the consumer to maintain robust spending in the face of slowdown, and the Federal Reserve’s reaction to the simultaneous threats to its dual mandate. On the policy front, we expect to gain clearer insight into the effects of fully implemented tariffs and immigration restrictions. Although economic growth is being driven primarily by two narrowly defined engines—wealthy consumers and technology investment—we believe the backdrop for credit remains constructive with a solid foundation for corporate earnings growth that keeps default and recession risks within reasonable bounds.

The favorable, if imperfect, backdrop enhances the relative value appeal of credit—especially in subsectors such as structured credit and private credit—where investors can pick up yield due to complexity and/or illiquidity.

Click here to view the report.

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

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