ICE BofA 3-5 Year US Corporate Index Option-Adjusted Spread
This dataset tracks ice bofa 3-5 year us corporate index option-adjusted spread over time.
Latest Value
0.71
Year-over-Year Change
1.43%
Date Range
12/31/1996 - 8/11/2025
Summary
The ICE BofA 3-5 Year US Corporate Index Option-Adjusted Spread measures the average difference in yield between corporate bonds and comparable U.S. Treasury securities. This metric provides critical insight into corporate credit risk and market sentiment across medium-term corporate debt instruments.
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 represents the additional compensation investors require for holding corporate bonds compared to risk-free government securities. Economists and financial analysts use this indicator to assess corporate credit conditions, market stress, and potential economic risks.
Methodology
The spread is calculated by analyzing option-adjusted yields of investment-grade corporate bonds with 3-5 year maturities, comparing them against Treasury securities with similar durations.
Historical Context
Central banks and policymakers monitor this spread as a key indicator of financial market health and potential economic turbulence.
Key Facts
- Wider spreads indicate higher perceived corporate credit risk
- Reflects investor confidence in corporate financial health
- Provides early signals of potential economic stress
FAQs
Q: What does a rising corporate bond spread mean?
A: A rising spread typically suggests increasing market uncertainty and higher perceived risk in corporate borrowing. Investors demand greater compensation for holding corporate debt during periods of economic volatility.
Q: How often is this index updated?
A: The ICE BofA Corporate Index is typically updated daily, providing real-time insights into corporate credit market conditions.
Q: Why do investors care about this spread?
A: The spread helps investors assess relative value, credit risk, and potential investment opportunities in corporate bonds compared to government securities.
Q: How does this index relate to economic policy?
A: Central banks and economic policymakers use this spread as a barometer of financial market stress and potential economic challenges.
Q: What limitations exist in interpreting this spread?
A: The spread represents a broad market view and may not capture nuanced risks of individual corporate issuers or specific industry sectors.
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Citation
U.S. Federal Reserve, ICE BofA 3-5 Year US Corporate Index Option-Adjusted Spread [BAMLC2A0C35Y], retrieved from FRED.
Last Checked: 8/1/2025