Will the US economic outlook worsen? The US credit risk spread hits a new high since May 7, 2025.

K-LinePoet

2026-03-11 08:13:48

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As of February 27, 2026, data shows that the yield spread between U.S. CCC-rated high-yield bonds and 10-year government bonds has reached 8.96%, the highest since May 7, 2025. This indicates an increased risk of corporate defaults and is an important signal of worsening economic prospects.

(Data source: Tonghuashun (300033) iFinD)

The credit spread, which is the difference between high-yield bonds and government bonds, reflects the market’s expectation of future corporate default risk.

When the economy is strong and businesses are performing well, the risk of corporate defaults decreases, bond yields fall, and the credit risk spread narrows; conversely, during an economic downturn when companies are close to bankruptcy, corporate bond yields rise sharply, and the credit risk spread widens significantly.

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