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Corporate bond spread (Baa minus 10Y)

Corporate bond spread (Baa minus 10Y) is 1.5% and has been falling over the last 3 months. That is near the bottom of its range: higher than 3% of readings since 2006.

Latest (latest reading)

1.5%

As of

Nov 12, 2026

3-month change

−19 bps

1-year change

−27 bps

20-year percentile

3rd

20-year median

2.3%

Monthly averages, last 20 years. Shaded band = the middle half of readings.

What it is. Extra yield medium-grade companies pay over Treasuries; long history back to 1986. A higher reading means more credit stress in the Credit reading.

What it affects next

Corporate bond spread (Baa minus 10Y) is falling: 1.5% (−19 bps in 3 months, 3rd percentile of the last 20 years). Here is what has tended to follow, based on links the data backs up.

→Industrial production: has tended to rise about 6 months later. Watch
If history repeats, watch for it around May 2027. Link strength 0.57.
→Nasdaq Composite: has tended to rise in the same month. Not following yet
So far it is moving the other way (−13 % pts over 3 months), which is worth watching. Link strength 0.54.
→Real GDP: has tended to rise in the same month. Not following yet
So far it is moving the other way (−0.13 % pts over 3 months), which is worth watching. Link strength 0.85.

What is driving it

←Lending standards, small firms is rising, which has historically lined up with this indicator rising at the same time.
Link strength 0.64. Banks and bond investors tend to pull back at the same time.

All tested links

Corporate bond spread (Baa minus 10Y)leadsIndustrial productionData agrees
When companies pay more to borrow, they invest and produce less. Typical lag: 3-9 months. Strongest match 6 months later (correlation -0.57, 363 observations since 1996).
Corporate bond spread (Baa minus 10Y)moves withNasdaq CompositeData agrees
Credit stress and falling stocks usually arrive together. Typical lag: 0 months. Strongest match in the same period (correlation -0.54, 371 observations since 1996).
Lending standards, small firmsmoves withCorporate bond spread (Baa minus 10Y)Data agrees
Banks and bond investors tend to pull back at the same time. Typical lag: 0-3 months. Strongest match in the same period (correlation 0.64, 124 observations since 1996).

Source: Moody's via FRED (series BAA10Y). This series is copyrighted by its provider and shown here for educational, non-commercial use.