China’s showing that they have power in the relationship, as anyone who’s a buyer of U.S. Treasuries does. It’s been this symbiotic relationship for the past 15 years or so. I don’t think that’s worked out so poorly for the U.S..
The market is barely reacting. The markets are getting desensitized when these things happen multiple times.
With spreads tighter, the chance that investors earn their coupon is certainly lower than what it was a year or two ago. If we have an inflationary world with higher rates, or risk-off and deflationary world, that could be challenging for high-yield.