ICE BofA BB US High Yield Index Option-Adjusted Spread
This dataset tracks ice bofa bb us high yield index option-adjusted spread over time.
Latest Value
1.81
Year-over-Year Change
10.37%
Date Range
12/31/1996 - 8/11/2025
Summary
The ICE BofA BB US High Yield Index Option-Adjusted Spread measures the average spread between BB-rated corporate bonds and U.S. Treasury securities, reflecting credit market risk and investor sentiment. This metric provides crucial insights into the perceived financial health of lower-rated corporate debt and overall market risk perception.
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 yield investors demand for holding high-yield (or 'junk') corporate bonds compared to risk-free government securities. Economists and financial analysts use this indicator to gauge credit market stress, corporate financial conditions, and potential economic volatility.
Methodology
The spread is calculated by analyzing option-adjusted spreads for BB-rated corporate bonds, accounting for embedded options and providing a standardized risk measurement.
Historical Context
Central banks, investment managers, and policymakers use this index to assess credit market conditions and potential economic risks.
Key Facts
- BB-rated bonds represent lower-tier speculative-grade debt
- Higher spreads indicate increased market uncertainty
- Used as a leading indicator of economic stress
FAQs
Q: What does a widening spread indicate?
A: A widening spread suggests increased perceived risk in corporate debt markets, potentially signaling economic challenges or reduced investor confidence.
Q: How often is this index updated?
A: The ICE BofA High Yield Index is typically updated daily, providing real-time insights into credit market conditions.
Q: Why are option-adjusted spreads important?
A: Option-adjusted spreads provide a more accurate risk measurement by accounting for embedded options in corporate bonds, offering a nuanced view of credit market dynamics.
Q: How do investors use this spread?
A: Investors use this spread to assess relative value, manage portfolio risk, and make informed decisions about high-yield bond investments.
Q: What are the limitations of this index?
A: The index focuses specifically on BB-rated bonds and may not fully represent the entire high-yield bond market or broader economic conditions.
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Citation
U.S. Federal Reserve, ICE BofA BB US High Yield Index Option-Adjusted Spread [BAMLH0A1HYBB], retrieved from FRED.
Last Checked: 8/1/2025