High credit spread

Does an increase in yield increase or decrease return? On one hand I tend to think increase in treasury yield leads to a drop in treasury prices hence lower returns. On the other hand, the textbook gave a yield/spread pickup trade that between general motor and ford, who issued the same quality paper, an investor may want to choose whoever offers higher yield. So does high yield offer higher or lower returns? Thanks.

you missed the point about what they are talking about in the GM / Ford situation.

They are saying there that a manager may ignore the credit difference between the issues, pick up the one with a wider spread - with the idea that it is priced lower, and hence would give a greater return later.

But in the very next sentence they say that such “yield” ignoring the “credit” part is bad. If the higher rated bond had a spread narrowing, while the lower rated one did not, the higher rated bond (I think it was the GM A rated bond) would have better returns.