Duncan Lamont, head of Strategic Research at Schroders, analyzes corporate bond spreads using a century of data. Current credit spreads appear "piddly" on a 30-year view, but extending the timeline reveals nuance. Post-World War II spreads were similarly low, with five potential parallels to today. Government debt levels around 100% of GDP — last seen in the late 1940s — correlate with narrower spreads due to Treasuries' diminishing "convenience yield" as debt becomes abundant. Arvind Krishnamurthy & Annette Vissing-Jorgensen's 2007 paper demonstrated this statistically; Lamont extended the analysis to 2025. The Congressional Budget Office forecasts US debt rising to 156% of GDP by 2055, potentially sustaining lower spreads.

Postwar growth averaged nearly 4% annually (1947-1969) with zero investment-grade defaults and only 0.4% sub-investment-grade defaults versus a 2.9% long-run average. This virtuous cycle broke when persistent inflation from the mid-1960s increased uncertainty. Today, AI productivity gains could mirror strong growth but effects would be uneven — benefiting hyperscalers and AI stack businesses while increasing credit risk in consumer sectors amid potential unemployment.

Lamont concludes this "convenience yield" argument is one of the strongest cases for spreads staying lower for longer, though recessions and default risk spikes would still widen spreads temporarily.