Credit
Written October 1, before the latest jobs report and CPI inflation. The numbers and charts on this page are current; figures in the text may not be.
Credit is still healthy. Spreads just started to move.
The high-yield spread widened 0.42 points in six trading days to 3.08%, still below its March high. Card delinquencies fell for an eighth straight quarter, to 2.85%.
The Briefing · Written October 1, 2026 · Numbers and charts update with each release
Spreads jumped in the last week of September
High-yield and Baa corporate bond spreads over Treasuries, %
Sources: ICE BofA (BAMLH0A0HYM2), Moody's (BAA10Y), daily through September 29.
The credit market is healthy on levels, but the direction changed. The high-yield spread, the extra yield investors demand to lend to riskier companies, rose from 2.66% on September 21 to 3.08% on September 29 after reaching a low of 2.60% on August 28. It remains below the 3.46% of March 30 and far below the 4.61% of April 2025. The Baa spread edged up to 1.46% from 1.39%, well under March's 1.85%.
Households look sound. Credit card delinquency fell to 2.85% in the second quarter, the eighth straight quarterly decline from the 3.22% peak of Q2 2024. Consumer credit growth is 2.58%, so borrowing is not accelerating, and initial claims of 197,000 show no wave of layoffs. The 10-year to 3-month Treasury spread widened to 1.09% on September 30, its steepest since July 2022.
What a 3.08% spread means for you
Riskier companies pay more to borrow
A wider spread raises financing costs for lower-rated companies first. If it persists it can slow hiring and investment at the margin.
Card borrowers are keeping up
Delinquency has fallen eight quarters in a row, so households are meeting card payments despite thinner savings.
Layoffs aren't the problem
Initial claims of 197,000 are below the 219,000 to 259,000 weekly range of September 2025. Layoffs would be the next place to look for stress, and they are not appearing.
The next test: what would change the answer
Low confidence on direction. Levels are calm and the move is days old. The next few weeks show whether it was a blip or a turn.
The high-yield spread holding above 3% for more than a few weeks instead of reverting, which would make the late-September move a trend.
Card delinquency turning up from 2.85% in the next quarterly reading, after eight straight declines.
Initial claims rising from 197,000 back toward the 219,000 to 259,000 range of last September, which would link market stress to job losses.
Questions readers ask
Is the US credit market under stress?
Not by level. The high-yield spread is 3.08%, below the 3.46% of March and well under the 4.61% of April 2025. But it rose 0.42 points in six trading days in late September.
What is a credit spread?
The extra yield investors demand to hold a corporate bond over a Treasury of similar maturity. A wider spread means investors see more risk of default.
Are credit card delinquencies rising?
No. The delinquency rate fell to 2.85% in Q2 2026, the eighth straight quarterly decline from the 3.22% peak in Q2 2024.
What does the yield curve say?
The 10-year to 3-month Treasury spread is 1.09%, positive and the steepest since July 2022. An inverted curve, not a steep one, is the traditional recession warning.
Is consumer borrowing accelerating?
No. Consumer credit grew 2.58% in July, below the 3.08% of February 2026.