Credit Stress, Today
Live corporate credit spreads across rating tiers — the bond market's view of risk in real time. With historical context and what each pattern signals.
Current tier readings
Each tier shows the option-adjusted spread (OAS) — extra yield above Treasuries — for that rating bucket. Tighter spreads = market confidence. Wider spreads = stress. Updated daily from FRED.
High Yield OAS — the broad junk-bond view
The single cleanest measure of credit market stress. Spikes correspond to recessions and credit crises. Peaked at 19.88% on Dec 16, 2008 (GFC) and 10.87% on Mar 23, 2020 (COVID).
Data: ICE BofA US High Yield Index Option-Adjusted Spread, via FRED.
CCC tier — the canary
The lowest-rated junk bonds. When the bond market starts pricing in real default risk, it shows up here first. Watch this chart relative to the HY OAS above — when CCC diverges higher while HY stays compressed, the canary is chirping.
Data: ICE BofA CCC & Lower US High Yield Index Option-Adjusted Spread, via FRED.
Investment Grade — for reference
The safest end of the corporate credit market. Compare to the charts above — IG stays remarkably compressed even as CCC starts to flash. That divergence is the story.
Data: ICE BofA US Corporate Index Option-Adjusted Spread, via FRED.
How to read this
Credit goes first. The bond market has weeks-to-months of warning ahead of equity markets and central banks. Corporate bondholders care primarily about being repaid — they don't get to participate in upside. So when they start demanding more compensation to lend, it means the underlying risk picture is shifting before stock prices have caught up.
The tiers tell different stories. Investment Grade reflects how the safest credits are perceived. CCC reflects how the most marginal borrowers are perceived. In a healthy expansion, all tiers compress together. In a late-cycle environment, the tiers separate — CCC widens while IG stays calm. That gap is the warning.
The current pattern. Lighthouse's dashboard reads COMPRESSED at the composite level, but with one yellow flag: CCC at the 62nd percentile while IG and BB sit at single-digit percentiles. This isn't a crisis signal. It's an early-warning divergence — historically these patterns can persist for months before something material happens. But they rarely resolve to the upside.
What to watch alongside spreads. Consumer credit conditions (delinquency rates on cards, auto loans, student loans) often crack before corporate credit catches up. The 2026 picture is unusual — consumer side is at 15-year highs while corporate side remains compressed. That bifurcation is itself a signal worth watching.