The spread of U.S. CCC-rated corporate bonds has exceeded 1,000 basis points

The spread between the riskiest corporate bonds in the U.S. and U.S. Treasuries has risen by more than 1,000 basis points, higher than the 860 basis points at the beginning of September, marking the first time since the regional banking crisis in 2023.

Collin Martin, the Director of Fixed Income Research and Strategy at Charles Schwab, stated that the main driving factor is that the economy is performing well, but not particularly strong, and CCC-rated issuers are the most sensitive to interest rate changes.