Long Term Perspective
Note that the spread between the Baa Corporate and the 10-year Treasury note is wider than the spread between the Aaa corporate bond and the Treasury security. This reflects market views of credit conditions among these lower rated corporate bonds.

Short Term Perspective
Yields on Baa corporate bonds are down from their peak reached in May 2000, but are hardly unchanged despite rapid declines in the Treasury market in 2001. As yields on Treasury securities have inched lower in the past six months, yields on Baa bonds have declined more slowly. The Baa average yield inched down in November, but remains above levels of the past several months. Default risk is a larger concern for Baa rated corporate bonds than Aaa rated bonds.

2-year Treasury Yield & Spread to Fed Funds   •   10-year Treasury Yield & Spread 10-year less 2-year

Yield Spread: Aaa Corporate vs. 10-year Treasury   •   Yield Spread: Baa Corporate vs. 10-year Treasury

Yield Spread: Bond Buyer vs. 10-year Treasury