The current US credit spread: Moody's Baa corporate bond yield minus the 10-year Treasury — a real-time gauge of credit-market stress and recession risk, with 40 years of history.
As of August 28, 2026, the US credit spread — the extra yield on Moody's Baa corporate bonds over the 10-year Treasury — is 1.60 percentage points, which is very tight by historical standards. Tight spreads mean calm, risk-on credit markets; wide or rapidly rising spreads signal credit stress and have historically accompanied US recessions.
Moody's Baa Corporate Bond Yield minus 10-Year Treasury (FRED BAA10Y) · as of August 28, 2026
Weekly history back to 1986. The dashed line marks the average for the selected period — watch the spikes around the 2008 financial crisis and the 2020 shock.
The credit spread is the gap between what risky corporate borrowers pay and what the US government pays to borrow. When investors are confident, they accept only a small premium to hold corporate bonds, so the spread is tight. When they grow fearful about defaults and the economy, they demand a much larger premium and the spread widens — often before stress shows up in the stock market. That makes it one of the cleanest early reads on financial conditions, and a natural companion to the yield curve.
This credit spread is the extra yield investors demand to hold Moody's Baa-rated corporate bonds instead of safe 10-year US Treasuries. It measures how much compensation the market wants for corporate default risk: a small spread means investors are relaxed about credit, while a large spread means they are worried.
A tight (low) spread signals calm, risk-on credit markets — the spread has historically averaged around 2 to 3 percentage points. A widening spread signals rising stress, and sharp spikes above roughly 4 to 5 points have accompanied recessions and crises such as 2008 and 2020. Very tight spreads can also reflect complacency near market peaks.
Credit markets often flash stress before equities do. When lenders start demanding much more yield to lend, financial conditions tighten and the borrowing that drives growth can dry up. The credit spread pairs naturally with the yield curve — together they are two of the most-watched early warning signals for a US recession.
Yes — it shows the current, latest reading and refreshes automatically. The Baa minus 10-year Treasury spread is published daily by the Federal Reserve (FRED), so the live value reflects the most recent available data.