“Some of the people who should be most worried about rising rates are credit investors,” says Francesco Garzarelli, co-head of global macro and markets research at Goldman Sachs. “It’s all very well to say credit spreads could grind in 25bp to 50bp tighter in a strong economic recovery, but that’s not much use if rates blow out by 100bp.”
The truth, of course, is that rising rates would affect all markets and all market participants – borrowers, investors, intermediaries – and few if any would emerge unscathed.
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