Spreads are on the move in the bond market, especially for lower credit bonds. The spread between the Bank Of America/Merrill Lynch US High Yield index and 10-year treasuries has widened out to 623 basis points which is the largest spread since June 2012. It's not just junk bonds that are making multi-year highs in spreads, however. The spread between BAA and 10-year treasuries is the widest since July 2012 and the spread between BAA and junk is the widest since September 2012. The recent widening between junk yields and 10-year treasury yields has mirrored the decline in breakeven inflation expectations. On 9/29, 10-year TIPS implied breakeven inflation expectations made a six-year low at just 139 basis points.