ICE BofA 5-7 Year US Corporate Index Option-Adjusted Spread
This dataset tracks ice bofa 5-7 year us corporate index option-adjusted spread over time.
Latest Value
0.86
Year-over-Year Change
0.00%
Date Range
12/31/1996 - 8/8/2025
Summary
The ICE BofA 5-7 Year US Corporate Index Option-Adjusted Spread measures the average difference in yield between corporate bonds and U.S. Treasury securities for a specific maturity range. This metric provides critical insight into corporate credit risk and market sentiment by indicating the additional compensation investors require for holding corporate debt versus risk-free government securities.
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 credit risk premium for medium-term corporate bonds, reflecting market perceptions of corporate financial health and potential default risk. Economists and investors closely monitor this indicator as a barometer of corporate financial conditions and broader economic stress.
Methodology
The spread is calculated by comparing the yield of a basket of 5-7 year corporate bonds against comparable U.S. Treasury securities, with statistical adjustments to account for embedded options.
Historical Context
Financial analysts and policymakers use this metric to assess corporate credit conditions, potential economic downturns, and overall market risk perception.
Key Facts
- Measures credit risk for medium-term corporate bonds
- Wider spreads indicate higher perceived market risk
- Provides insights into corporate financial health
FAQs
Q: What does a widening spread indicate?
A: A widening spread suggests increasing market uncertainty and higher perceived corporate credit risk. Investors demand more compensation for holding corporate bonds relative to government securities.
Q: How often is this index updated?
A: The ICE BofA Corporate Index is typically updated daily, providing real-time insights into corporate bond market conditions.
Q: Why do economists track this spread?
A: The spread serves as a leading indicator of economic stress, helping predict potential economic downturns and changes in corporate financial conditions.
Q: How does this index differ from other bond spread measures?
A: This specific index focuses on 5-7 year corporate bonds and uses option-adjusted calculations to provide a more nuanced view of credit risk.
Q: What factors can influence the spread?
A: Economic conditions, corporate earnings, interest rates, market sentiment, and overall economic outlook can significantly impact the corporate bond spread.
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Citation
U.S. Federal Reserve, ICE BofA 5-7 Year US Corporate Index Option-Adjusted Spread [BAMLC3A0C57Y], retrieved from FRED.
Last Checked: 8/1/2025