Excess bond premium
The part of what US companies pay to borrow over a Treasury bond that their own default risk does not explain: how much the bond market is charging for credit risk as such.
Signed in, this page is worked on your own portfolio: your peak, your trough, your figure. Sign in ›
How it is computed here
Published monthly by Federal Reserve Board staff, with Gilchrist and Zakrajšek's method: the average spread of US corporate bonds over Treasuries with the same payments, minus the part each company's measured default risk would predict. Stored here as published, from 1973, and replaced whole on every update because the Board revises the entire history.
Worked example
- In Jul 2026, the average US corporate bond paid 0.84 points more than a Treasury bond with the same payments: the Gilchrist–Zakrajšek credit spread.
- Each company's own measured default risk would predict a spread of 1.16 points; the difference, -0.32, is the excess bond premium — negative when lenders charge less than that risk alone would ask.
- That premium is at or above 17% of the months since 1973.
The market's own figures, as the U.S. Treasury and the Federal Reserve Board publish them, read once a day — the same for every reader. They describe that date; nothing here says what comes next. All of them on one page ›
Where it misleads
It is a research series, not an official statistic: every new month can revise past values, so the figure for a given month can differ from the one shown a month ago. A high premium has coincided with tighter credit in the past; it says what lenders charged, not what happens next.