Commercial Paper Outstanding Climbs to $1.41 Trillion as Credit Spreads Remain Narrow

Total commercial paper outstanding reached $1,410.0 billion for the week ending March 11, 2026, marking a weekly increase of $13.0 billion. Despite this growth, the credit spread between A2/P2 and AA-rated paper remains tight at just 19 basis points. This suggests that short-term funding markets are currently operating with minimal friction despite broader equity market volatility.

Outstanding Amounts

The $13.0 billion weekly increase in total outstanding paper brings the market to $1,410.0 billion, positioned comfortably within its 52-week range of $1,288.7 billion to $1,472.7 billion. While the week-over-week trend is positive, the market has actually contracted by $20.4 billion on a month-over-month basis. This recent uptick suggests a slight increase in short-term borrowing demand from corporations and financial institutions. The current level remains roughly $62 billion below the yearly peak, indicating there is still significant capacity for expansion.

Interest Rates

Fed Funds: 3.64% | 3M T-Bill: 3.61%

Commercial paper rates are currently hovering near the Fed Funds Rate of 3.64%, with the 30-day AA financial rate at 3.65%. The 90-day AA financial rate of 3.68% indicates a relatively flat term structure, suggesting expectations for stable interest rates in the near term. With the 30-day AA nonfinancial rate at 3.72%, the premium over the 3-month T-bill is a modest 11 basis points. These low funding costs relative to benchmarks imply that high-quality corporate borrowers still enjoy favorable access to liquidity.

Credit Spreads

The credit spread between A2/P2 and AA nonfinancial paper currently sits at 19 basis points, which is below the historical median of 24 basis points. This narrow spread indicates that investors are not demanding a significant premium for taking on lower-quality corporate credit risk. In times of severe market stress, this spread can balloon toward the historical high of 615 basis points. The current 19-point gap signals high confidence in the solvency of tier-2 issuers.

Credit Spread Trend

Historical Context

The current credit spread is in the 28th percentile of all historical observations, placing it in a relatively benign environment for credit risk. Historical parallels from 2024 and 2025 show that similar spread levels often precede positive equity performance. Specifically, the median S&P 500 return three months after such spread levels is +3.4%, with a 50% success rate. Over a six-month horizon, the median return improves to +6.9%, with 75% of periods showing positive gains.

Sector Breakdown

Financial commercial paper continues to dominate the market, accounting for $608.9 billion or 43% of the total outstanding. Nonfinancial paper saw the largest weekly growth, increasing by $6.1 billion to reach $347.8 billion. Asset-backed commercial paper (ABCP) remains a significant component at $446.1 billion, representing 32% of the total market share.

Funding-Sensitive Stocks

While the major equity indices like the S&P 500 and Nasdaq fell over 1.5% today, the stability in the commercial paper market provides a silver lining for funding-sensitive stocks. Banks and asset managers benefit from the low 19-basis-point credit spread, which keeps their short-term borrowing costs predictable. Corporate issuers in the nonfinancial sector also benefit from the narrow gap between AA and A2/P2 rates. If spreads were to widen, it would signal a tightening of credit that would typically weigh on growth-oriented equities.

Market Implications

The current +8 basis point spread of commercial paper over the Fed Funds Rate suggests that money markets are well-supplied with liquidity. There is no immediate sign of the funding squeeze that often precedes broader financial crises. Banks are utilizing the market efficiently, as evidenced by the $3.1 billion weekly increase in financial CP. Overall credit conditions remain accommodative, providing a buffer against the recent volatility seen in the Dow and S&P 500.