Data through: Nov 5, 2026 · updated Nov 7 · Updates: Daily
WThe three bars show the last 3 weeks for this indicator, oldest left to newest right. Bar height reflects each reading relative to the other two — the tallest is the highest of the three, the shortest the lowest.
Historical context: Currently in the 10th percentile — near historically low/favorable levels.
What this means right now: The Baa spread is tight — corporate borrowing costs are low and no credit stress is visible. About 1 day in 4 since 1986 (26%) has read this low.
Baa–10yr Treasury Spread · Daily · 1986–2026
NBER recessions
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Monthly values
Baa–10yr Treasury Spread — the last 12 months
Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.
Month
Value
Band
Nov 2026
1.57%
Very strong reading
Oct 2026
1.53%
Very strong reading
Sep 2026
1.47%
Very strong reading
Aug 2026
1.59%
Very strong reading
Jul 2026
1.63%
Very strong reading
Jun 2026
1.53%
Very strong reading
Month-end readings of the same series as the chart. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.
What is the Baa–10yr Spread?
The Baa–10yr spread (FRED: BAA10Y) is the difference between Moody's Seasoned Baa Corporate Bond Yield and the 10-Year Treasury Constant Maturity yield. Baa is the lowest investment-grade rating; these bonds represent the credit of typical large US corporations. The spread measures the extra yield investors demand as compensation for corporate default risk and credit uncertainty above the risk-free Treasury rate.
When the economy is calm and corporate balance sheets are healthy, investors accept narrow spreads — the Baa premium above Treasuries compresses toward its historical floor. When recession risk rises, defaults increase, or credit markets seize up, the spread widens dramatically as investors demand more compensation for holding corporate credit. The BAA10Y spread has a history back to 1986, capturing multiple full credit cycles.
Unlike the HY and IG spreads, which track bond indices, the Baa–10yr spread comes from Moody's long-running yield series. Its history reaches back to 1986, far longer than the site's HY and IG series, which begin in 2023.
How We Color-Code the Baa–10yr Spread
Our heatmap colors this indicator against historically significant thresholds:
Below 1.75%
Tight — credit markets calm, as on about 1 day in 4 since 1986 (26%)
1.75% – 2.25%
Healthy — investment-grade credit broadly available; the most common band, about 1 day in 3 since 1986 (33%)
2.25% – 3.00%
Moderate — some credit caution but no widespread stress, about 3 days in 10 since 1986 (29%)
3.00% – 4.00%
Elevated — meaningful credit stress and rising corporate borrowing costs, about 1 day in 9 since 1986 (11%)
4.00% or above
Severe — reached only twice through September 2026, in 2008–09 and March 2020 (176 days in all); credit markets impaired
Historical Extremes — What Happened Next?
When this indicator reaches extreme levels, history shows consistent patterns:
Dec 4, 2008GFC Peak Spread
6.16%
The widest spread on record, which begins in 1986 — credit markets froze as Lehman's collapse set off mass deleveraging. Corporate bond issuance halted; investment-grade companies paid more than 6 percentage points above Treasuries.
Mar 23, 2020COVID Shock Spike
4.31%
Spreads spiked sharply as markets feared a deep recession and corporate cash flow collapse. The Fed's emergency March 2020 announcement of the Corporate Credit Facility (CCF) directly addressed this market. By the end of June 2020 the spread was back to 2.93%, more than half of the rise from 1.97% in January retraced.
Nov 10, 2021Post-COVID Trough
1.66%
The tightest spread since February 2018 at the time; it was passed in December 2023. Spreads have gone lower since, to 1.36% in November 2024. The series' record low is 1.16%, in March 1989.
Frequently Asked Questions
What is Moody's Baa rating and why is it used for this spread?
Baa is the lowest investment-grade rating tier in Moody's scale (equivalent to BBB in S&P/Fitch). Investment-grade bonds are held by pension funds, insurance companies, and most institutional investors. The Baa tier matters because it sits at the boundary between investment grade and high yield. A company downgraded below Baa becomes a "fallen angel" and is sold by investment-grade mandates, creating a credit cliff. That boundary is why the Baa spread is read as a gauge of broader credit stress.
How does the Baa–10yr spread differ from HY and IG spreads?
The Baa–10yr spread (FRED BAA10Y) measures the absolute yield of Moody's Baa corporate bonds minus the 10-year Treasury. The IG spread (BAMLC0A0CM) and HY spread (BAMLH0A0HYM2) are option-adjusted spreads from the ICE BofA index series. The Moody's series has a much longer history (1986 vs. ~1997 for BofA), making it better for long-run comparisons, but the BofA spreads are more granular and standardized. Since May 2023, when the site's IG and HY series begin, the three have moved together: their monthly changes correlate between about 0.7 and 0.8.
Why did the Fed create emergency corporate credit facilities in March 2020?
When the Baa spread spiked to 4% or above in March 2020, it threatened a self-reinforcing credit crisis — companies unable to roll over maturing debt at reasonable rates, leading to defaults, then more spread widening. The Fed's Primary Market Corporate Credit Facility (PMCCF) and Secondary Market Corporate Credit Facility (SMCCF) explicitly targeted investment-grade corporate bonds, including Baa-rated credits. The spread peaked at 4.31 points on March 23, 2020, the day of the announcement, and narrowed from there. Half the widening was undone by late May, and the spread was back under 2.25 by December 2020.
What is the relationship between this spread and economic recessions?
In the four recessions from 1986 to 2020 the spread's low came 11 to 24 months before the recession began, and the spread was already widening at each start. Its peak came inside each recession, one to six months before it ended: December 1990, September 2001, December 2008 and March 2020. It peaked at 3.53% in the 2001 recession and at 6.16% in the GFC.
How are this page's colour levels set?
Below 1.75% the spread is tight and credit markets are calm. From 1.75% to 2.25% it is healthy: investment-grade credit is broadly available at normal cost. From 2.25% to 3.00% investors show some caution, but no widespread stress. From 3.00% to 4.00% the stress is meaningful and corporate borrowing costs are rising. At 4.00% or above, credit markets are impaired; the spread has gone that high only in 2008–09 and March 2020. They are fixed levels, set in June 2026 with the series' whole history in view, and they do not move as new data arrives. A spread of 3.00% gets the same colour in 1990 as today, so a change of colour is a change in the spread, never in the yardstick.