what is a yield spread 
a yield spread is the difference between yields on differing debt instruments of varying maturities credit ratings issuers or risk levels a yield spread is calculated by deducting the yield of one instrument from the other this difference is most often expressed in basis points bps or percentage points yield spreads are commonly quoted in terms of one yield versus that of u s treasuries where it is called the credit spread for example if the five year treasury bond is at 5 and the 30 year treasury bond is at 6 the yield spread between the two debt instruments is 1 if the 30 year bond is trading at 6 then based on the historical yield spread the five year bond should be trading at around 1 making it very attractive at its current yield of 5 investopedia ellen lindner