According to credit rating agency Standard & Poor, US default rates edged up sharply in February and has reached highest level since 2009, surpassing the levels seen during the collapse of Lehman Brothers. In February it has jumped to 3.3%, compared to 2.8% in January.
These numbers may not look big but one needs to consider FED's large balance sheet and near zero interest rates, which might be keeping a lid over the numbers. Moreover when conditions deteriorate these numbers could edge up pretty fast. Back in 2007, US corporate default rate was 1.02%, that edged up to 2.96% during Lehman collapse and a staggering 12% in 2009 before FED introduced easing. Standard & Poor is forecasting that default rates will edge closer to 4% by end of 2016.
Latest data shows downgrade is on the rise. In February S&P upgraded only 20 companies while downgrading 110, bringing the ratio to 5.5:1. Spread is also on the rise. Average spreads between CCC or lower corporates and US treasuries have reached more than 20%. This phenomenon is also impacting investment grade bonds, where spread is also on the rise.
US is at a critical juncture, when any adverse shock in the economy such as China hard landing could once again push it to the brink.


Arm Breaches Qualcomm License Deal, Jury Awards $2
Binance to Shut Down Crypto Mining Pool Services on November 10
Oil Prices Mixed as Russia Diesel Deal and Houthi Attacks Raise Supply Concerns
ASML Raises 2026 Sales Forecast as AI Chip Demand Surges
Trump Defends Russian Diesel Deal Amid US Sanctions Backlash
European Auto Stocks Rise as EU-China Trade Deal Targets Hybrid Imports
New York Times, AFP Join Coalition to Protect Content From AI
Philippines Current Account Deficit Seen at $19.1 Billion in 2026
Interactive Brokers Launches Ethereum Staking With Zerohash
IMF Maintains 2027 Global Growth Forecast at 3.4% Amid Rising Risks
US Dollar Slips From 18-Month High Ahead of Key Inflation Data
China Bank Lending Rebounds in September, Beats Forecasts




