Reverse Yield Gap
A reverse yield gap occurs when a bond yield exceeds an equity yield measure, changing the relative valuation signal between fixed income and stocks.
Bond yield spread and yield-gap terms that compare bond returns against benchmarks or other asset classes.
Spread and yield-gap measures compare one yield with another yield, benchmark, or asset-class return.
Use this branch when the investing question is about compensation over a reference rate, the gap between bonds and equities, or how a spread changes with credit, liquidity, duration, tax, or market stress.
| Term | What it clarifies |
|---|---|
| Yield Spread | The difference between two yields, often a bond yield and a benchmark yield. |
| Reverse Yield Gap | A market condition where an equity yield relationship reverses versus bond yields. |
Identify both sides of the comparison: benchmark, maturity, currency, credit quality, tax treatment, liquidity, option features, and quote date. A wider spread can signal higher expected compensation, but it can also reflect deteriorating credit quality, weak liquidity, or structural complexity.
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A reverse yield gap occurs when a bond yield exceeds an equity yield measure, changing the relative valuation signal between fixed income and stocks.
Yield spread is the difference between two yields, usually quoted in basis points to compare maturity, credit, liquidity, or relative value.