QUICK DEFINITION
Bond Spread is the yield difference between two bonds or between a bond and a chosen benchmark.
WHY IT MATTERS
Why Bond Spread matters in bond markets
Spreads isolate relative compensation for risks such as credit, liquidity, maturity or jurisdiction.
MARKET CONTEXT
How to think about it
Bond investors use bond spread as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Bond Spread important for fixed-income investors?
← Back to the Bond Market Glossary Yes. Spreads isolate relative compensation for risks such as credit, liquidity, maturity or jurisdiction.