Will high-yield option-adjusted spreads exceed 450bp for five consecutive trading days in H2 2026?

The Federal Reserve, under Chair Kevin Warsh, has signaled a hawkish stance by holding rates at 3.50 to 3.75 percent and removing prior cutting bias. The June 2026 SEP median projection for the year end 2026 funds rate has significantly increased to 3.8 percent, with a majority of participants expecting rates to remain above the current target range. This suggests a sticky high rate environment, which, combined with potential further tightening or prolonged elevated rates, increases the probability of high yield OAS widening, though exceeding 450bp for five consecutive days requires a significant credit event or sustained risk aversion.