Credit Spreads Tracker: HYG/LQD, Actual OAS & Credit Stress
See whether credit is confirming risk appetite or quietly deteriorating. The page combines a daily, tradeable HYG/LQD proxy with actual option-adjusted spreads for broad high yield and CCC debt, long-cycle Baa history, and weekly CFTC credit-swap activity. The measures answer different questions, so the most useful read is where they agree—or diverge.
Pair credit with the VIX term structure, Hindenburg Omen, and sector health for cross-asset confirmation.
Today's reading
As of market close on October 20, 2026, the HYG/LQD credit ratio is 0.7443 — +0.88σ vs its 1-year history and +1.33σ vs its 3-year history. That puts the spread regime at NORMAL (day 1), a neutral credit read. The ratio fell from 0.7468 the prior session. The series covers 3,932 trading days since 2011. The latest actual-spread data, from October 19, 2026, put broad high-yield OAS at 3.29%, while CCC-and-lower OAS is 13.10% — the 100th percentile of its record since October 2023. BB, the strongest junk tier, is 2.00%, 50 basis points above its past-year low, against 488 for CCC. The latest CFTC report, covering the week ended October 2, 2026, recorded $1665.1 billion of market-facing credit-swap notional — the 94th percentile of its trailing year, classified ELEVATED. That is an activity measure. It says nothing about the direction of CDS spreads.
Sources, methodology & freshnessDaily closes for 9 credit & Treasury ETFs from our price database; weekly credit-swaps activity from the CFTC Weekly Swaps Report · ETF ratios daily after close; CFTC swaps activity weekly after the Monday releaseData as of 2026-10-20 · Open ↓Close ↑
NORMAL regime · day 1. HY/IG ratio near its long-run mean. No directional credit signal.
Threshold to watch: Below −1σ enters WIDE; above +1σ returns the proxy to TIGHT. Actual HY and CCC spreads widening together would strengthen a risk-off read.
ETF credit proxy and regime distance
HYG/LQD is the fast daily read: when speculative-grade bonds outperform investment grade, the ratio rises. The synchronized z-score pane shows whether that move is statistically TIGHT, NORMAL, WIDE, or STRESS relative to its own trailing year.
HYG / LQD ratio and regime distance
The upper pane shows high yield relative to investment grade; the lower pane shows exactly how far the signal sits from each rolling 1-year regime boundary. A rising ratio and positive z-score favor risk-on credit. SPY appears as faint context on wider screens.
Current level and lookback changes
NORMAL · 1.88σ above the −1σ risk-off boundary
| Last close | 0.7443 | 2026-10-20 |
| 6-month change | +1.51% | |
| 1-year change | +3.46% | |
| 2-year change | +4.14% | |
Recent regime transitions
Newest first · rolling 1-year z-score
| 2026-10-20 | TIGHT→NORMAL |
| 2026-10-19 | NORMAL→TIGHT |
| 2026-10-15 | TIGHT→NORMAL |
| 2026-07-07 | NORMAL→TIGHT |
| 2026-05-27 | TIGHT→NORMAL |
Actual spread levels and the credit-quality split
Credit quality is diverging
Broad credit is calm; the weakest borrowers are not
The broad Baa risk premium sits near the tight end of its range since 1993, while CCC-and-lower OAS is near the wide end of its shorter record since 2023. That split is more informative than either headline alone: the market is rewarding stronger issuers while charging materially more for the weakest balance sheets.
Spreads by rating · ICE BofA OAS
Where in the ratings is the widening?
Each tile is one rating tier of the US junk-bond market, from BB (the strongest) to CCC and lower (the weakest), beside the broad index. Read the widening from each tier's tightest close of the past year: when stress is spreading, the better tiers move with the weakest; when it is confined, only CCC moves. As of Oct 19, 2026, CCC spreads were 4.88 points above their past-year low against 0.50 for BB, about 10 times the move.
Option-adjusted spreads over Treasuries, in percentage points (FRED BAMLH0A0HYM2, BAMLH0A1HYBB, BAMLH0A2HYB, BAMLH0A3HYC), latest 2026-10-19. FRED serves these ICE BofA series over a rolling three-year window; our record starts Oct 9, 2023 and every daily run adds to it, so percentiles describe that record and claim nothing about earlier cycles. Higher means wider, which means more stress.
Credit risk premium vs the S&P 500 — since 1993
The HYG/LQD ratio only reaches back to 2011. For the long view, the credit risk premium — Moody's Baa corporate yield minus the 10-year Treasury, a 3-year moving average on an inverted axis so tight spreads sit at the top — is plotted against the S&P 500 (grey, right axis). Credit has compressed to cycle lows before prior equity tops; the dashed line marks today's level.
Lowest-rated credit (CCC) vs the S&P 500 — since 2023
The sharpest credit-stress gauge: the CCC & lower junk-bond option-adjusted spread (ICE BofA), weekly on an inverted axis. The weakest borrowers crack first, so CCC spreads widening while the S&P 500 (grey) holds near highs is the classic late-cycle warning. Weekly history begins in October 2023 (ICE/FRED licensing).
The gap between the weakest borrowers and the merely mediocre
Neither line above tells you whether credit stress is spreading. This one does. It subtracts the Baa spread from the CCC spread, so it measures what a weak borrower pays over a mediocre one, and plots it against how far the S&P 500 sits below its own high (grey). A gap that widens while the market falls is the ordinary case. A gap that widens while the market does not is the rare one.
CFTC credit-swaps activity — weekly
Actual swaps-market data
Credit-swap turnover is elevated — a volume read
In the week ended October 2, 2026, the CFTC recorded $1.67T of new market-facing credit-swap notional — 26.7% above its prior four-report average and the 94th percentile of the trailing year. Index and tranche products accounted for $1.33T across 17,004 tickets.
This answers a different question from HYG/LQD: how much credit risk changed hands, not whether protection became more expensive. High volume can reflect hedging, unwinds, rolls, or rebalancing, so an activity surge is not automatically bearish.
Weekly credit-swap transaction notional
New market-facing trades, split by investment grade, high yield, and other credit products. The black line is the prior four-report average.
Credit swaps outstanding — cleared vs uncleared
The stock of open market-facing notional. This is analogous to futures open interest; it is not the amount expected to default or the market's net loss exposure.
Latest six reporting weeks
| Week ended | Traded | Index/tranche | Tickets | Outstanding | 52W pctile |
|---|---|---|---|---|---|
| 2026-10-02 | $1.67T | $1.33T | 17,765 | $8.59T | 94.2 |
| 2026-09-25 | $3.29T | $2.95T | 19,543 | $8.32T | 100.0 |
| 2026-09-18 | $899.5B | $595.1B | 10,038 | $7.40T | 78.8 |
| 2026-09-11 | $558.3B | $349.6B | 6,688 | $7.55T | 44.2 |
| 2026-09-04 | $509.6B | $299.1B | 5,604 | $7.33T | 32.7 |
| 2026-08-28 | $399.7B | $270.3B | 4,622 | $7.17T | 7.7 |
Three ways to watch credit spreads
The metric on this page is an ETF price ratio: HYG (iShares iBoxx $ High Yield Corporate Bond ETF) divided by LQD (iShares iBoxx $ Investment Grade Corporate Bond ETF). It's a tradeable, freely available proxy for credit-market risk appetite — but it is not the same thing as a traditional credit spread, and a professional desk would typically watch all three of the views below in parallel.
Traditional credit spreads — like the ICE BofA US High Yield Index Option-Adjusted Spread (OAS) published by FRED as BAMLH0A0HYM2 — measure the actual yield differential between high-yield bonds and comparable Treasuries, controlled for embedded options. Bloomberg and Refinitiv terminals additionally provide intraday bond-level pricing and curve analytics that neither this page nor FRED can match.
| Property | HYG/LQD ETF proxy (this page) | ICE BofA HY OAS (FRED) | Terminal workflow (Bloomberg, Refinitiv) |
|---|---|---|---|
| What it measures | Relative ETF price performance of HY vs IG | Actual yield premium of HY bonds vs Treasuries | Real-time bond yields, OAS, curves, issuer-level data |
| Update cadence | Daily close on this page; ETFs trade intraday | Daily, with one-business-day publication lag | Real-time intraday |
| Tradeable | Yes (the underlying ETFs) | No (it's a published statistic) | N/A (workflow tool — execution happens elsewhere) |
| Affected by ETF flows / mechanics | Yes — premium/discount, AP arbitrage, NAV drift | No — pure bond pricing | No — issuer-level pricing |
| Direction during stress | Falls (HY underperforms IG) | Rises (HY yields spike vs Treasuries) | Both views available |
| Cost | Free | Free | Subscription |
| Best for | Quick risk-on/off read for retail traders | Literal spread levels; FRED now serves only a rolling recent window (this page holds it from October 2023), so the multi-decade history needs a licensed source | Professional desks needing intraday execution context |
For most discretionary purposes, the ETF ratio is sufficient and timelier than FRED OAS. For research that requires literal spread levels (basis points over Treasuries), use the OAS series; reproducing academic studies over full cycles needs ICE's licensed history, since FRED's copy covers only recent years. For real-time execution on individual issuers, a terminal is the right tool.
Historical event study — did credit see it coming?
How well credit spreads have signaled equity drawdowns over the past two decades. The signal has worked clearly in some episodes (2007–2008, sector-level in 2015–16) and barely registered in others (2020 was coincident, 2024 was cross-asset volatility). Use this as context for any single read. Credit is one input among several and does not forecast on its own.
| Event | Window | HY OAS before | HY OAS peak | SPY drawdown | Lead/lag read |
|---|---|---|---|---|---|
| 2007–2009 Global Financial Crisis | Jul 2007 – Mar 2009 | ~3% in mid-2007 | ~21.8% (Nov 2008) | –55% peak-to-trough | Credit led — HY OAS started widening months before the equity peak in October 2007. |
| 2011 European Debt Crisis | Jul – Oct 2011 | ~5% in mid-2011 | ~9% (Oct 2011) | –19% peak-to-trough | Roughly coincident — credit and equities widened/sold off together over a few weeks. |
| 2015–2016 Energy / EM Stress | Jul 2015 – Feb 2016 | ~5% in mid-2015 | ~9% (Feb 2016) | –14% peak-to-trough | Credit-led at the sector level — energy HY blew out well before broad equity weakness. |
| Q4 2018 selloff | Sep – Dec 2018 | ~3.2% in Sep 2018 | ~5.4% (Dec 2018) | –19% peak-to-trough | Roughly coincident — modest credit signal relative to the depth of the equity drawdown. |
| 2020 COVID crash | Feb – Mar 2020 | ~3.5% in Feb 2020 | ~11% (late Mar 2020) | –34% in 33 days | Largely coincident — both moved violently in the same weeks. Credit didn't provide much lead time. |
| 2022 rate-hike cycle | Jan – Oct 2022 | ~3% in Jan 2022 | ~6% (Sep 2022) | –25% peak-to-trough | Modest credit signal vs depth of equity drawdown — this was primarily a duration / discount-rate event. |
| Aug 2024 yen carry unwind | Aug 2024 | ~3% beforehand | ~3.5% (no notable spike) | –8% (brief) | Credit barely moved. This was a cross-asset volatility/leverage event; credit itself stayed calm. |
Approximate, rounded peak values of the ICE BofA US High Yield Index Option-Adjusted Spread. FRED publishes that index as BAMLH0A0HYM2 but now serves only a rolling recent window (the copy on this page starts in October 2023), so these episode peaks predate what FRED shows and exact values require ICE's licensed history. SPY drawdowns measured peak-to-trough on SPY price.
Takeaway: credit-spread widening has been a useful but inconsistent leading indicator. It worked best in episodes where the underlying stress was credit-driven (2007–08, sector-level energy in 2015–16). It worked poorly when the equity drawdown was driven by something else — discount-rate shocks (2022) or pure volatility/leverage events (2020, 2024). Pair this with VIX, breadth, and price action.
Credit complex — recent returns
| Symbol | Description | Last | 1d | 1w | 1m | 3m | YTD |
|---|---|---|---|---|---|---|---|
| HYG | HY Corp | $76.83 | +0.00% | -0.34% | -2.35% | -3.38% | -4.71% |
| JNK | HY Bond | $92.24 | -0.02% | -0.45% | -2.61% | -3.67% | -5.11% |
| LQD | IG Corp | $103.22 | +0.33% | +0.65% | -1.78% | -3.23% | -6.33% |
| EMB | EM Bond | $91.22 | +0.14% | -0.04% | -2.73% | -4.07% | -5.26% |
| BKLN | Sr Loan | $20.30 | -0.10% | -0.83% | -1.26% | -0.39% | -3.33% |
| AGG | Aggregate | $95.27 | +0.17% | +0.59% | -0.98% | -2.37% | -4.62% |
| TLT | 20Y Treasury | $80.13 | +0.84% | +2.25% | -2.07% | -3.97% | -8.07% |
| IEF | 7-10Y Treasury | $90.25 | +0.19% | +0.79% | -0.99% | -3.06% | -6.15% |
| SHY | 1-3Y Treasury | $81.30 | -0.01% | +0.14% | +0.01% | -0.65% | -1.84% |
Supporting ratios
Four cross-confirmation ratios alongside the primary HYG/LQD signal. Each card shows the most recent close, the period change over the selected time range, and a one-line read of what the ratio captures. Use them to distinguish credit-driven moves (HYG/LQD, JNK/AGG) from rates-driven moves (TLT/HYG) and from emerging-market stress (EMB/LQD).
HYG / LQD
0.7443HY corp vs IG corp — primary credit-stress signal
JNK / AGG
0.9682Junk vs aggregate bond — alternative HY/IG view
EMB / LQD
0.8837EM bonds vs US IG — emerging-market credit appetite
TLT / HYG
1.0430Long Treasuries vs HY — rates duration vs credit risk
NORMAL regime · day 1. HY/IG ratio near its long-run mean. No directional credit signal.
Threshold to watch: Below −1σ enters WIDE; above +1σ returns the proxy to TIGHT. Actual HY and CCC spreads widening together would strengthen a risk-off read.
The Manual — credit spreads
The Baa−Treasury spread sits at 1.48pp (29th percentile of the monthly BAA10YM record since 1953) and the daily HYG/LQD regime reads normal. The full owner's guide covers what a credit spread actually prices, the famous blowouts computed from 7 decades of data — 2008's 6.01pp peak — and the 2007 lesson: spreads warn by being too calm, not by being loud.
Read The Credit Spreads Manual →How Credit Spreads Tracker Works
- 1Pull daily prices for nine credit and Treasury ETFsEach trading day after the close, we fetch closing prices for HYG, JNK, LQD, EMB, BKLN, AGG, TLT, IEF, and SHY directly from the TradeStation market-data API.
- 2Compute the HYG/LQD ratio plus three supporting ratios with rolling z-scoresThe primary signal is HYG (high-yield corporates) divided by LQD (investment-grade corporates). We z-score it against rolling 252-day (1-year) and 756-day (3-year) windows. Three supporting ratios — JNK/AGG, EMB/LQD, and TLT/HYG — give cross-confirmation.
- 3Classify the current regime and surface as Risk On or Risk OffZ-scores ≥ +1σ are TIGHT (Risk On). Between -1σ and +1σ is NORMAL (Neutral). -1σ to -2σ is WIDE (Risk Off). Below -2σ is STRESS (severe Risk Off). The big label at the top of the page tells you which regime credit is currently in.
- 4Add the CFTC’s weekly credit-swaps activity reportEach Monday release adds market-facing credit-swap transaction notional, ticket counts, index/tranche share, clearing share, and gross outstanding notional aggregated across registered swap data repositories. We use only the comparable post-December-2022 methodology. This measures how much risk changed hands, not whether CDS protection became more expensive.
- 5Zoom out: the S&P 500 vs the credit risk premiumThe HYG/LQD ETF ratio only goes back to 2011. For the long view, a second chart overlays the S&P 500 (log scale) on the credit risk premium: Moody's Baa corporate yield minus the 10-year Treasury, from FRED's daily BAA10Y series (published since 1986), resampled monthly, smoothed with a 3-year moving average and inverted so tight spreads sit high. The chart starts in February 1993, where the SPY record begins. It uses Baa-10Y because FRED serves the ICE BofA high-yield OAS only over a rolling recent window (the copy this page holds begins in October 2023); the latest HY OAS is shown alongside. A separate monthly series, BAA10YM, reaches back to April 1953 and feeds the Manual. Credit has compressed to cycle lows before past equity tops (the late 1990s, the mid-2000s), though tight spreads flag complacency and do not time the top.
- 6Watch the weakest credit: CCC junk spreads vs the S&P 500A third chart plots the lowest-quality junk tier, the ICE BofA CCC & Lower high-yield OAS (FRED BAMLH0A3HYC), weekly on an inverted axis against the S&P 500. CCC borrowers are the most fragile, so their spreads widen first when credit conditions deteriorate; CCC widening while equities hold near highs is the classic late-cycle warning. FRED licensing limits this series to a rolling recent window and our record starts in October 2023, so it is a recent view and cannot show earlier cycles.