Katusa Research · Market Sentiment
High Yield Spreads Today: Live Junk Bond Spread Chart
The ICE BofA US High Yield option-adjusted spread: what junk-bond investors demand over Treasuries. Updated daily from FRED.
High yield spreads sit at 2.67% as of July 07, 2026. That’s near the tightest level of the past three years (2.59% in January 2025), and well under the 4.61% stress peak of April 2025.
Tight spreads mean credit markets see little risk. That is exactly when they pay the least to take it.
| Reading | Value | When |
|---|---|---|
| Current | 2.67% | 2026-07-07 |
| 3-year low | 2.59% | January 2025 |
| 3-year high | 4.61% | April 2025 |
| 2008 crisis peak | ~20% | November 2008 |
| Covid spike | ~11% | March 2020 |
The Gauge
What the Spread Tells You
Junk-rated companies pay a premium over Treasuries to borrow. That premium is the spread, and it moves with fear. Under 3%, credit investors are relaxed and money is easy. Past 7%, something is breaking. Near 20%, as in late 2008, the credit market is pricing mass default.
Credit tends to sniff out trouble before equities do. Spreads started widening in mid-2007, months ahead of the stock market’s peak. That’s why traders watch this line even when they never touch a bond.
Reading It
Tight Spreads Cut Both Ways
A 2.67% spread says default risk feels distant. It also says you earn almost nothing extra for owning risky debt. When compensation for risk gets this thin, small shocks move prices fast. The spread’s floor is well-defined; its ceiling is not.
Reading the Gauge
What Tight or Wide Spreads Mean
A tight (low) spread means credit investors see little default risk, money is easy, and risk appetite is high. That comfort is itself a warning: you’re paid almost nothing to take risk, so surprises hit hard. A wide (high) spread means fear. Borrowing costs for risky companies jump, refinancing windows slam shut, and defaults follow. The widest readings in history have marked the best moments to buy risk assets.
| Range | What it means |
|---|---|
| Under 3% ← TODAY | Complacent. Easy money, thin compensation for risk. Today: 2.67%. |
| 3% to 5% | Normal. The long-run middle of the range. |
| 5% to 7% | Stress building. Credit is repricing risk ahead of equities. |
| 7% to 10% | Recession pricing. Defaults rising, liquidity thinning. |
| Over 10% | Crisis. Covid touched ~11%; 2008 neared 20%. Historically a generational entry point. |
FAQ
Frequently Asked Questions
What are high yield spreads right now?
2.67% as of 2026-07-07, near the bottom of the past three years’ range.
What is a high yield credit spread?
The extra yield junk-rated corporate bonds pay over Treasuries of similar maturity. It is the market price of default risk, quoted as an option-adjusted spread.
What happens when high yield spreads widen?
Borrowing costs jump for risky companies, refinancing gets hard, and defaults follow. Sharp widening has preceded or accompanied every recession since the series began. Equities usually feel it with a lag.
Why does this chart only go back three years?
FRED’s license for ICE BofA data limits the downloadable window. The series itself dates to 1996: spreads peaked near 20% in the 2008 crisis and near 11% in the Covid panic of March 2020.
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This page is for information only. It is not investment advice, an offer, or a solicitation to buy any security. Data comes from public sources and can contain errors or delays. Do your own research before you invest.
