AAA vs Fed Funds Spread

Moody's Aaa Corporate Bond Yield minus Federal Funds Rate — how much the policy rate is being passed through to the safest corporate borrowers. When narrow or negative, even AAA-rated companies effectively face policy rates: maximum transmission of monetary tightening. A widening spread indicates the bond market expects lower future short rates, effectively easing financial conditions regardless of the Fed's current stance.

This indicator is computed by MacroLab from two FRED series: AAA minus FEDFUNDS. Both input series are sourced from the Federal Reserve Economic Data (FRED) database.