Monetary Policy Report submitted to the Congress on February 27, 2008, pursuant to section 2B of the Federal Reserve Act
Figure of default rate on outstanding corporate bonds, 1992-2008. Data are plotted as a curve. The default rate is about 1 percent in the beginning of 1992, falls to near zero in the middle of that year, and then fluctuates at low levels well below 1 percent through 1998. The default rate generally begins to rise in 1999, reaching a peak of nearly 4 percent in 2002, and then generally falls back to near zero by 2004. It then rises and falls several times in 2005, peaking at just over 1 percent in late 2005, and falls to near zero by the middle of 2006. It remained near zero through January 2008.
Note: The data are monthly and extend through January 2008. The rate for a given month is the face value of the bonds that defaulted in the six months ending that month, multiplied by 2 to annualize the defaults and then divided by the face value of all bonds outstanding at the end of the calendar quarter immediately preceding the six-month period.
Source: Moody's Investor Service.