JPMorgan, Barclays See Credit Spreads Coming Under Pressure

US corporate bonds outperformed stocks and other markets last week. Some Wall Street firms wonder how long that can last.

Risk premiums for high-grade US corporate notes widened just 0.01 percentage point last week, according to Bloomberg index data, even as stocks fell more than 4.7%. The Federal Reserve is likely to hike rates this week, and probably won’t hint at the possibility of slowing its tightening, which is one of the reasons there’s a “more cautious backdrop” for investment-grade notes this week, JPMorgan Chase & Co. strategists led by Eric Beinstein wrote on Monday.

Issuers seem cautious about ...