The Option-Adjusted Spread on the Bloomberg US Aggregate Corporate Bond Index. Measures the extra yield investment-grade bonds pay over Treasuries.
IG spreads signal stress in the corporate bond market. A widening IG spread means the cost of capital is rising for blue-chip companies — a leading indicator of slowing investment.
Below 100bps = tight, healthy corporate financing. 100-150bps = elevated. Above 150bps = stress. Above 250bps = crisis-level.