Flight to Quality

A market phenomenon where investors move their capital from riskier investments to safer ones during periods of economic uncertainty or market volatility.

This shift often leads to increased demand for high-quality assets such as government bonds, blue-chip stocks, and other low-risk securities, while riskier assets like high-yield bonds and equities may see decreased demand and falling prices.

Bond Spread often widens during a flight to quality, reflecting the increased perceived risk of lower-quality investments compared to safer ones.