Understanding bond spreads, comparing yield of different bond's, is an art as much as it is a science. As an example, it seems to me that the current narrowing of spreads between Treasury debt and credits is saying that the bond market demands higher Treasury yields. That reflects market recognition of the possibility of a US debt crisis/renegotiation at some time in the future, and signaling inflation forces are genuinely lurking nearby. It seems pretty easy to say that. Paul Krugman puts a different perspective on this in a recent post titled "A Note on the Term Spread". In his post he makes this interesting point...
"More broadly, on the risks-of-default thing: surely if investors were growing worried about US ability to honor its debts, they would be worrying about a breakout of inflation as well as or instead of default per se. But we can track that by comparing interest rates on ordinary bonds and inflation-protected bonds. What we see is that from 3/17 to 3/30 — the period that inspired all those recent scare stories — the nominal interest rate on 10-year bonds rose by 26 basis points; the real rate rose by 28 basis points. So expected inflation actually declined, marginally.
This is not at all what you’d expect to see if markets were pricing in fears about the US ability to repay. It is, on the other hand, exactly what you’d expect to see if markets slightly upgraded their hopes of recovery."