Is This a Financial Market Variable?

The high yield corporate bond spread is the difference between the interest rate on a so-called highield corporate bond these are bonds issued by corporations of lower quality below investment grade. On average historically that spread has been almost on the nose five hundred basis points five percent and it you know i'm taking it all the way back to when the junk bond market was put on the planet in the late 90s with by michael milkin 500 basis pointsso we're exactly within a basis point equal to the long run average now Historically uh... that spread will rise when the economy is under a lot of stress and recession is a real threat right because investors think oh we're going into recession businesses are going