CCC Junk Bond Spread Hits 13.56 Points as Credit Spreads Widen

The extra yield investors demand to hold the riskiest U.S. junk bonds rose to 13.56 percentage points on Friday, Oct. 23, according to ICE BofA index data published by the Federal Reserve Bank of St. Louis on FRED. That was up 0.59 point from 12.97 on Oct. 16 and 3.07 points from 10.49 on Sept. 1. It is the highest option-adjusted spread for the ICE BofA CCC & Lower U.S. High Yield Index in the daily data FRED makes available, which begin Oct. 27, 2023.

Unlike two weeks ago, when we reported the CCC spread widening while broader credit steadied, the move now runs across the market. Spreads widened in every rating bucket we track over the week to Oct. 23. Oct. 23 is the latest date in the FRED series as of Monday afternoon, Oct. 26.

Credit spreads by rating, Sept. 1 to Oct. 23

Option-adjusted spread, percentage points	Sept. 1	Oct. 7	Oct. 16	Oct. 23	Change in week
High yield, all	2.65	3.09	3.31	3.38	+0.07
BB	1.52	1.89	2.03	2.06	+0.03
B	2.75	3.08	3.35	3.43	+0.08
CCC and lower	10.49	12.29	12.97	13.56	+0.59
Investment grade, all	0.81	0.82	0.85	0.91	+0.06
BBB	0.99	1.02	1.06	1.13	+0.07

Source: ICE BofA indexes via FRED, Federal Reserve Bank of St. Louis.

The broad high-yield spread reached 3.40 on Thursday, Oct. 22, the widest since 3.46 on March 30, before easing to 3.38 on Friday. The investment-grade spread rose on each of the last three days in the data, from 0.87 on Oct. 20 to 0.88, 0.89 and 0.91. The last time it was 0.91 or wider was March 30, at 0.93. The BBB spread, at 1.13, matched its March 31 level.

Why are credit spreads widening?

The FRED data show where spreads moved, not why. They do show that the pressure is still heaviest at the bottom of the rating scale. Since Sept. 1, the CCC spread has widened 3.07 points, against 0.73 point for the broad high-yield index, 0.54 point for BB bonds and 0.10 point for investment grade.

What does this mean for corporate borrowing costs?

For investment-grade companies, falling Treasury yields offset the wider spreads last week. The index's effective yield slipped to 5.84% on Oct. 23 from 5.86% on Oct. 16, FRED data show, as the 10-year Treasury yield fell to 5.00% from 5.09%, according to the Treasury Department. For the weakest borrowers, costs kept rising.

Effective yield, percent	Sept. 1	Oct. 16	Oct. 23
High yield, all	7.18	8.14	8.14
CCC and lower	14.93	17.66	18.17
Investment grade, all	5.53	5.86	5.84

Sources: ICE BofA effective yields via FRED.

The CCC index's 18.17% yield on Oct. 23 was its highest of 2026 in the FRED data. The broad high-yield yield is just below its 2026 high of 8.22% on Oct. 1.

When does the Fed meet?

The Federal Open Market Committee meets Tuesday and Wednesday, Oct. 27–28, according to the Fed's calendar. The meeting has no new economic projections; the next set comes with the Dec. 8–9 meeting. Dates and past decisions are on our FOMC meeting schedule for 2026 and 2027. More data briefs are in the Capital Markets section.