HY minus IG Credit Spread

ICE BofA US High Yield OAS minus ICE BofA US Investment Grade OAS — the marginal risk premium for junk over investment-grade credit. When this differential compresses, risk appetite is high and lower-quality borrowers access capital cheaply. When it widens sharply, it signals credit stress and potential tightening in lending standards, which historically precedes capex and hiring pullbacks by 3–6 months.

This indicator is computed by MacroLab from two FRED series: BAMLH0A0HYM2 minus BAMLC0A0CM. Both input series are sourced from the Federal Reserve Economic Data (FRED) database.