The percentage gap between the current yields of different categories of high-yield bonds and benchmark bonds like investment-grade corporate bonds or Treasury bonds. This spread, also known as the credit spread, measures the extra yield that investors demand to hold higher-risk high-yield bonds compared to lower-risk benchmark bonds. A larger spread indicates a perceived higher level of credit risk associated with high-yield bonds. The high-yield bond spread is a key indicator used by investors to assess market sentiment and gauge changes in credit risk conditions.
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