Moody's Seasoned Aaa Corporate Bond Minus Federal Funds Rate
AAAFF • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
0.97
Year-over-Year Change
-18.49%
Date Range
10/6/2021 - 8/5/2025
Summary
This economic indicator measures the spread between high-quality corporate bond yields and the federal funds rate, reflecting the cost of corporate borrowing relative to short-term lending rates. It provides insight into credit market conditions and potential economic stress.
Analysis & Context
This economic indicator provides valuable insights into current market conditions and economic trends. The data is updated regularly by the Federal Reserve and represents one of the most reliable sources for economic analysis.
Understanding this metric helps economists, policymakers, and investors make informed decisions about economic conditions and future trends. The interactive chart above allows you to explore historical patterns and identify key trends over time.
About This Dataset
The trend represents the difference between Moody's top-rated corporate bond yields and the federal funds rate, serving as a key metric for understanding credit market dynamics and potential economic signals. Economists use this spread to assess market liquidity, credit risk, and potential economic turning points.
Methodology
The data is calculated by subtracting the federal funds rate from the yield of Moody's Seasoned Aaa Corporate Bonds, typically sourced from financial market data and Federal Reserve reporting.
Historical Context
This indicator is crucial for policymakers, investors, and analysts in evaluating credit market conditions, monetary policy effectiveness, and potential economic shifts.
Key Facts
- Measures the difference between top-rated corporate bond yields and federal funds rate
- Provides insight into credit market conditions and potential economic stress
- Used by economists and policymakers to assess market liquidity and risk
FAQs
Q: What does a widening spread typically indicate?
A: A widening spread often suggests increased market uncertainty or perceived higher credit risk in the corporate sector.
Q: How do changes in this indicator impact investment decisions?
A: Investors use this spread to assess potential economic conditions and adjust their investment strategies accordingly.
Q: How frequently is this data updated?
A: The data is typically updated regularly, with most sources providing monthly or quarterly updates.
Q: What makes Aaa corporate bonds significant?
A: Aaa bonds represent the highest credit quality, making them a reliable benchmark for assessing corporate borrowing costs.
Q: Can this indicator predict economic downturns?
A: While not definitive, significant changes in this spread can be an early warning sign of potential economic challenges.
Related Trends
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Moody's Seasoned Aaa Corporate Bond Yield Relative to Yield on 10-Year Treasury Constant Maturity
AAA10Y
1-Year Treasury Constant Maturity Minus Federal Funds Rate
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10-Year Treasury Constant Maturity Minus Federal Funds Rate
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5-Year, 5-Year Forward Inflation Expectation Rate
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Citation
U.S. Federal Reserve, Moody's Seasoned Aaa Corporate Bond Minus Federal Funds Rate [AAAFF], retrieved from FRED.
Last Checked: 8/1/2025