STOCKS | Andromeda Warns Rising Government Bond Yields Threaten Corporate Credit

London-based credit hedge fund Andromeda Capital Management said rising global government bond yields are posing an increasingly serious threat to the corporate bond market. According to Sina Finance, Alberto Gallo, the firm's chief investment officer and co-founder, said the U.S. government is trying to keep the dollar strong and suppress U.S. Treasury yields without rebalancing the budget or reducing debt. Gallo said that with large public borrowing and widening deficits, this approach is unsustainable. He added that either long-term yields must rise, which could trigger a credit crunch, especially amid heavy borrowing in the AI sector, or the currency must weaken. Gallo, who has worked in credit markets for more than 20 years, initially expected the dollar to weaken. He said that over the long term, high rates, high inflation, and record government spending could hit corporate bonds, adding that government bond yields are so high that the market may already have hit some icebergs.