Investor appetite for risk continues to surge as U.S. corporate credit spreads tighten to levels not seen in nearly three decades. This compression of credit spreads is also impacting the equity risk premium—the extra return investors demand for holding stocks over risk-free assets. As credit markets send signals of reduced financial stress, equities have become relatively more attractive. Inflation: CPI-PPI DivergenceU.S. inflation data delivered a mixed message last week. MARKETSKey ThemesContraction of Credit Spreads U.S. investment-grade credit spreads narrowed to 27-year lows amid yield chase and “FOMO” behavior.