US year on year inflation for November was 7.1% – down from 7.7% the prior month.

This lower print supports the scenario that inflation is coming down in response to increased interest rates. This helps reduce the risk that the Fed needs to tighten more aggressively than expected – and could even raise rates by less than the market currently expects.

This would in turn support issuers looking to raise next year or the following year – as both interest rates fall and credit spreads fall. A lower inflation print reduces the risks of a hard recession – which would put additional pressure on corporate balance sheets and so credit spreads needed by investors.