Reading the US Credit Markets: Elevated but not in Crisis

The CCC-BB spread tracks the difference in yield between lower-quality speculative-grade bonds (CCC-rated) and higher-quality junk bonds (BB-rated). When this spread widens, it signals that investors are demanding greater compensation for holding the riskiest credits (a classic early-warning signal of stress building in financial markets). When it tightens, it reflects investor confidence and a healthy appetite for risk.

What the Data Is Telling Us

Over the past two years, this spread has told an interesting story:

• Early 2023 saw elevated stress, with spreads well above historical norms

• By late 2024, spreads compressed to unusually tight levels (~5.4%), reflecting an exceptionally benign credit environment and strong investor risk appetite

• May 2025 brought a sharp reversal and spreads spiked back above an elevated stress threshold, reflecting macro uncertainty and shifting market sentiment

• Today, spreads sit at approximately 7.5%, elevated but not an indicator of systematic risk.

  
  

In plain terms: credit markets are not in crisis, but they are sending a cautionary signal that warrants attention.

In Astoria's views, macro risks are elevated due to the Middle East tension, but it's our view that US economy is resilient, and we expect it (and stock market) to power ahead.

What This Means for Your Portfolio

At Astoria, we believe that proactive, data-driven risk management is one of the most important services we provide to our clients. As credit spreads have moved off their tightest levels and macro uncertainty has increased, we have been actively reviewing our positioning across asset classes assessing exposure to rate-sensitive instruments, credit quality, alternatives, and sectors most vulnerable to tightening financial conditions.

Our approach remains as follows:

• Monitor a broad set of macro and market indicators in real time (we created a real time risk dashboard which we can give you access; please email me)

• Evaluate how shifting conditions affect risk and return across your portfolio

• Act decisively when the data supports a change in positioning

• Communicate transparently so you always understand what we are seeing and why

Source: Astoria. Data as of 3/10/2026

Important Information

There are no warranties implied. Past performance is not indicative of future results. Information presented herein is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed.

This information contained herein has been prepared by Astoria Portfolio Advisors LLC on the basis of publicly available information, internally developed data, and other third-party sources believed to be reliable. Astoria Portfolio Advisors LLC has not sought to independently verify information obtained from public and third-party sources and makes no representations or warranties as to the accuracy, completeness, or reliability of such information. Astoria Portfolio Advisors LLC is a registered investment adviser located in New York. Astoria Portfolio Advisors LLC may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements.

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Past performance is not indicative of future results.