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Tech Bubble Risk Monitor: High Yield Bond–Treasury Spread

Tracking credit conditions in the tech sector through ICE BofA High Yield vs. 10-Year Treasury spreads.

Market Risk Premium & Bubble Monitor

Tracking High Yield Corporate Bond Yield vs. Treasuries to signal shifts in market risk appetite.

Bubble Risk Trend
Last 1Y
Data Source: FRED

High Yield Corporate Bond Yield–Treasury Spread Analysis & Market Interpretation

Based on readings as of 2025-11-04, the High Yield Corporate Bond Yield (ICE BofA) is 6.85%, the 10-Year Treasury Yield is 4.10%, resulting in a spread of 2.75%. Current market risk sentiment is low risk. Wider spreads indicate elevated growth risk, whereas narrower spreads suggest lower bubble risk.

  • Current spread near 2.75%.
  • Historical trend suggests: moderate risk of overvaluation.
  • Investment guidance: monitor spread movements; consider defensive positioning if spreads widen sharply.
Current Regime
LOW RISK

Bands: LOW <3 · MODERATE 3–4 · HIGH 4–5 · EXTREME >5

Methodology & insights behind the Tech–Treasury Yield Spread

What is this indicator?

The Tech–Treasury Yield Spread measures how much higher the bond yields of major U.S. technology companies are compared to U.S. Treasury yields. In essence, it shows the market’s risk premium for lending to the tech sector.

When the spread widens:

  • Investors see higher risk in tech companies and demand more interest to lend.
  • Usually appears when confidence in tech stocks weakens.

When the spread narrows:

  • Investors are more confident in the tech sector and accept lower yields.
  • Typically signals a stable and favorable market environment.

How to read the data

The chart tracks the daily yield gap between tech corporate bonds and the 10-year U.S. Treasury note.
Widening spread → warning signal: investors seek more risk premium, tech valuations may face pressure.
Narrowing spread → positive signal: confidence improves, risk appetite returns.

Practical value

This indicator works as an early warning for potential tech stock bubbles. Tech companies rely heavily on financing; when their bond yields rise while Treasuries stay steady, it often means:

  • Investors are worried about tech firms’ debt sustainability.
  • Valuations may be overstretched.
  • Market risk is quietly building up.

Combine with other indicators

Why it matters

Tracking this spread helps investors detect valuation risks and liquidity shifts in the tech sector.
Widening spread: declining tolerance for high valuations.
Narrowing spread: renewed investor confidence and potential capital inflows.

Updated daily to help investors identify both tech stock risks and opportunities.

FAQ: Tech Bubble Risk & Credit Spreads

Why use High Yield Bond–Treasury spreads to monitor tech bubbles?

Because credit conditions in the high-yield market reflect investor risk appetite, particularly in sectors like technology that rely on external funding.

What does a 2.75% spread mean?

A narrow spread (below 3%) typically signals low bubble risk, suggesting investors are confident in credit conditions.