High Yield Spread
ICE BofA US High Yield Option-Adjusted Spread (percent)
High yield spreads are the market’s real-time “stress barometer” for credit. When spreads widen, investors are demanding more compensation for default risk and liquidity risk — and that typically coincides with tighter financial conditions, weaker equities, and a bid for duration. When spreads compress, risk appetite is healthy and funding is easier.
Historical High Yield Spread Chart
How to interpret high yield spreads
What “option-adjusted spread” means
OAS is the extra yield investors demand over Treasuries after adjusting for embedded options. It captures default risk, liquidity risk, and risk appetite. In risk-off periods, the spread can widen rapidly even before defaults rise.
Why spreads lead
Spreads are market-priced and forward-looking. They often widen ahead of weaker macro data because credit investors reprice risk as soon as earnings/cash flow expectations deteriorate or funding becomes scarce.
Regime signals
Compression tends to align with easy financial conditions and a supportive equity tape. Persistent widening often marks tighter conditions, higher recession odds, and tougher outcomes for leveraged firms.
Practical use
Use spreads as a “risk dashboard” input. If high yield spreads widen while inflation stays sticky and policy is tight, the downside tail tends to grow. If spreads tighten while growth holds, risk assets usually benefit.
Current Reading
Interpreting the Signal
Best cross-check
Compare with NFCI and the yield curve. If spreads widen while the curve is inverted and financial conditions are tight, macro downside risk typically increases.
Release Notes
Updated frequently and can move quickly around risk events. Treat it as a real-time gauge of funding stress and default risk pricing.
- Frequency: Daily
- Unit: Percent (%)
- Index: ICE BofA US High Yield OAS