Bond Spreads

Bond spreads are the difference in yield between two typs of bonds, or bond indexes due to credit quality. The illustrate how much more investors require in order to hold the riskier asset

Corporate Bonds and 10 Year Treasury Spread

The difference in yield between the FINRA/Bloomberg Corporate Bond Index (NBBI) and the 10 Year Treasury Bond in the chart below measures the additional return investors require when investing in the riskier corporate bonds. The 10 Year US Treasury Bond is often used as benchmark or shorthand for the entire US Treasury market.

Most Recent	Previous	Thirty Days	One Year
2.33	2.33	2.72	1.24
22-FEB-2012

End of Day

Source: FINRA

Source: US Dept. of Treasury

Expected Inflation

The difference in yield between the normal Treasury Bonds and Treasury Inflation Protected Securities (TIPS) is often referred to as the market's expectation for inflation because TIPS adjust for inflation and regular Treasuries do not investors are thought to be expressing an expectation for future inflation. The St. Louis Federal Reserve bank has a paper describing in detail the relationship.

Maturity	Most Recent	Previous	Thirty Days	One Year
5 Year	1.99	1.98	1.81	2.09
7 Year	2.07	2.08	1.99	2.16
10 Year	2.28	2.27	2.09	2.34
20 Year	2.38	2.39	2.20	2.59
30 Year	2.39	2.40	2.33	2.52
22-FEB-2012

End of Day

Source: US Dept. of Treasury

High Yield vs. Investment Grade Corporate Bonds

The spread between investment grade bonds and high yield (junk) bonds is illustrated here using the FINRA/Bloomberg Investment Grade Index (NBBI) and FINRA/Bloomberg High Yield Index (NBBH).

Most Recent	Previous	Thirty Days	One Year
3.60	3.62	4.09	3.18
22-FEB-2012

End of Day

Source: FINRA