ICE BofA US Corporate Index Option-Adjusted Spread
This dataset tracks ice bofa us corporate index option-adjusted spread over time.
Latest Value
0.82
Year-over-Year Change
2.50%
Date Range
12/31/1996 - 8/5/2025
Summary
The ICE BofA US Corporate Index Option-Adjusted Spread measures the average difference in yield between corporate bonds and risk-free Treasury securities, accounting for embedded options. This metric provides critical insight into corporate credit risk and overall market sentiment.
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
This spread reflects the additional compensation investors require for holding corporate bonds versus government securities, effectively indicating perceived corporate credit risk. Economists and investors closely monitor this indicator as a barometer of financial market stress and economic conditions.
Methodology
The spread is calculated by analyzing a broad index of US corporate bonds, adjusting for potential option features and comparing yields against comparable Treasury securities.
Historical Context
Central banks and financial analysts use this metric to assess corporate financial health, credit market conditions, and potential economic risks.
Key Facts
- Wider spreads typically indicate higher perceived corporate credit risk
- Calculated monthly by Bank of America Merrill Lynch
- Covers investment-grade corporate bonds across multiple sectors
FAQs
Q: What does a rising corporate bond spread mean?
A: A rising spread suggests increasing market uncertainty and higher perceived corporate credit risk. Investors demand more compensation for holding corporate bonds relative to safer government securities.
Q: How do option adjustments impact the spread calculation?
A: Option adjustments account for embedded bond features like call or conversion options, providing a more nuanced and accurate representation of bond yield differences.
Q: Why do investors track this economic indicator?
A: The spread serves as a leading indicator of economic health, providing early signals about corporate financial conditions and potential market stress.
Q: How frequently is this data updated?
A: The ICE BofA US Corporate Index Option-Adjusted Spread is typically updated monthly, offering a current snapshot of corporate credit market conditions.
Q: What are the limitations of this indicator?
A: While valuable, the spread represents an aggregate measure and may not capture nuanced risks for individual companies or specific market segments.
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Citation
U.S. Federal Reserve, ICE BofA US Corporate Index Option-Adjusted Spread [BAMLC0A0CM], retrieved from FRED.
Last Checked: 8/1/2025