⚡ Lighthouse Weekly

2026-05-22

This week's takeaway

Credit spreads tightened across the quality stack this week even as the Treasury curve sold off, with investment grade at 0.75% (1.6th percentile over 3 years) and high yield composite at 2.80% (13.2nd percentile). The dissonance is striking: the 10Y yield has climbed 31 bps over the past month to 4.57% as markets digest a Fed chair transition and rising hike odds, yet credit markets are pricing in near-record calm.

📊 The state of play

IG and BB spreads sitting near 3-year tights (1.6th and 9.5th percentiles) signal a credit market that sees no stress — but the CCC tier at the 73.3rd percentile, wider by 25 bps over the past month, hints that the lowest-quality cohort is quietly decoupling from the rally.

📉 Credit stack

Tier	Current	1d Δ	5d Δ	30d Δ	Percentile
Investment Grade	0.75%	-0.01	-0.01	-0.06	1.6%ile
BB	1.68%	-0.04	-0.03	-0.09	9.5%ile
Single-B	3.08%	-0.08	-0.02	+0.01	42.8%ile
CCC	9.40%	-0.08	+0.09	+0.25	73.3%ile
High Yield (composite)	2.80%	-0.06	-0.02	-0.07	13.2%ile

📰 The week in macro

Kevin Warsh is being sworn in as Fed chair on Friday, the first such ceremony held at the White House in nearly 40 years (CNBC, MarketWatch). The leadership transition lands as the 10Y yield sits 31 bps higher over the past month at 4.57%.
Fed funds futures traders have shifted to pricing the next move as a hike, potentially as soon as December, following an inflation surge (CNBC). The 2Y yield rose 6 bps on the week to 4.04%, consistent with that repricing.
April FOMC minutes released this week showed officials seeing a growing risk that inflation stays higher for longer, raising the chances of a rate hike (Federal Reserve, MarketWatch). Despite this, the 10Y-2Y curve steepened 7 bps on the week to 0.54%.
Trump signaled he will let Warsh 'do what he wants to do' on rates, easing more than a year of public pressure on the central bank (MarketWatch). Ed Yardeni argued Warsh may need to hike in July to appease 'bond vigilantes' (CNBC).
The Fed terminated enforcement actions tied to UBS and the legacy Credit Suisse entities (Federal Reserve), formally closing a chapter of the 2023 crisis resolution.

📈 Rates

Series	Current	1d Δ	5d Δ	30d Δ
10Y	4.57%	-0.10	+0.11	+0.31
2Y	4.04%	-0.09	+0.06	+0.32
30Y	5.11%	-0.07	+0.08	+0.23
10Y-2Y curve	0.54%	+0.04	+0.07	-0.01
Fed Funds	3.64%	0.00	-0.24	0.00

👀 Watching next week

Whether CCC spreads keep widening while higher-quality credit stays tight.

CCC spreads are up 25 bps over the past month to 9.40% (73.3rd percentile) even as IG sits at the 1.6th percentile — a divergence that often precedes broader credit repricing if it persists.

Changes shown as: 1d = previous trading day · 5d = past trading week · 30d = past month.
Drafted by AI from Lighthouse data + scored news. Reviewed and edited by Graham before send.
Live dashboard: macrolighthouse.com