Indicator Scorecard
Each indicator is scored against historical norms and crisis thresholds. Green means within safe range. Yellow means the reading warrants monitoring. Red means conditions consistent with prior crisis periods.
All 9 Indicators — Current vs. Prior
| Indicator | Current | Prior Period | Year Ago | Change |
|---|---|---|---|---|
| Business Loan Delinquency | 1.34% | 1.33% | 1.27% | 0.01pp ↑ |
| Business Loan Charge-Off | 0.55% | 0.57% | 0.51% | 0.02pp ↓ |
| Lending Standards (Small Firms) | 8.90% | 8.30% | 11.10% | 0.60pp ↑ |
| Yield Curve (10Y-2Y Spread) | 0.59% | 0.56% | 0.29% | 0.03pp ↑ |
| High-Yield Bond Spread | 3.13% | 3.00% | 3.09% | 0.13pp ↑ |
| Unemployment Rate | 4.40% | 4.30% | 4.00% | 0.10pp ↑ |
| All Loans Delinquency | 1.48% | 1.49% | 1.53% | 0.01pp ↓ |
| C&I Loans Outstanding | $2,741.7B | $2,708.7B | $2,664.3B | $33.0B ↑ |
| Business Debt-to-GDP | $8.72T | $8.66T | $8.53T | $0.07T ↑ |
Source: Federal Reserve FRED, ICE BofA. All data as of latest available.
The Verdict: Where We Stand
A debt crisis is not a binary event. It is a process. It begins when multiple stress indicators deteriorate simultaneously, and it accelerates when the deterioration compounds across categories. The question is never "is there a crisis?" but "how many warning lights are on, and are they multiplying?"
The Good News First
The yield curve has un-inverted. At +0.59%, the 10-year/2-year Treasury spread is back in positive territory after a prolonged inversion that began in mid-2022. Yield curve inversions precede recessions with remarkable reliability, but the recession typically arrives 12-18 months after the un-inversion, not during the inversion itself. So the yield curve is telling you: the stress from the inversion period is still working through the system.
High-yield spreads at 3.13% are calm. Below 3.5% is the bond market telling you that it does not expect a wave of corporate defaults. This is the single most reassuring data point on the dashboard. When spreads blow out above 6-8%, that is when credit markets seize. We are nowhere near that.
Unemployment at 4.4% remains below the 10-year average of 4.58%. The labor market is softening — unemployment has drifted up from 3.4% in early 2023 — but it is not breaking down. Consumers still have jobs, which means they can still service debt and spend money at your business.
The Caution Signs
Business loan delinquencies at 1.34% are above their 10-year average of 1.19% and trending higher. Charge-offs at 0.55% are 49% above the 10-year average of 0.37%. Banks are tightening lending standards for small firms (net +8.9% on SLOOS). And the total stock of nonfinancial corporate debt hit $8.72T — an all-time high.
This combination — rising delinquencies, rising charge-offs, tightening credit, and record leverage — is the pattern that precedes credit events. It was present in 2006-2007, in 2015-2016, and in early 2020. The question is whether it stabilizes here or continues to deteriorate.
What Would Change the Assessment
This dashboard would shift to HIGH RISK if three things happened: high-yield spreads broke above 5%, unemployment crossed 5%, and the yield curve re-inverted or lending standards spiked above 30%. None of those have occurred. What we have instead is a slow grind of deterioration in bank-level credit metrics against a backdrop of calm financial markets. That is precisely the environment that lulls people into complacency — the stress is real but not yet visible in headlines.
Why This Dashboard Matters
If you have business debt and want to know whether the macro environment is about to make it harder to service, this dashboard is your checklist. When the yield curve is inverted, high-yield spreads are widening, banks are tightening, and delinquencies are rising -- that is the pattern that preceded 2008. Not every deterioration leads to a full crisis, but the pattern demands attention and preparation.
Crisis Indicators — Frequently Asked Questions
This dashboard lets you assess the current risk level by checking ten indicators. Look at how many are in warning territory versus healthy ranges. A crisis requires deterioration across multiple categories, not just one or two isolated metrics.
The high-yield (junk bond) spread measures the extra yield investors demand to hold risky corporate debt versus safe Treasuries. Widening spreads signal that the market is pricing in higher default risk. Spreads above 5-6% typically indicate significant stress.
There is no precise threshold, but historical analysis shows that recessions and credit events occur when 6+ of these 10 indicators are deteriorating simultaneously. Fewer than 3 deteriorating is typically noise; 3-5 warrants monitoring; 6+ warrants defensive action.
Build 3-6 months of operating cash reserves, lock in fixed-rate refinancing on variable-rate debt, negotiate credit line extensions before they expire, delay non-essential capital expenditures, and explore debt restructuring options before conditions deteriorate further.
The credit risk dashboard focuses on bank loan metrics (delinquencies, charge-offs, lending standards). This dashboard is broader: it adds market indicators (yield curve, high-yield spreads), labor market data (unemployment), and structural leverage metrics (debt-to-GDP) for a more comprehensive crisis assessment.