The yield spread is the difference between the quoted rate of return on various debt instruments, which often have different maturities, credit ratings and risk.
The spread is easy to calculate as you subtract the return of one from the return of the other in percentage or basis points.
Yield spreads are often quoted in terms of yield versus US Treasury bonds or yield versus AAA corporate bonds.
When yield spreads widen or narrow, it can signal changes in the underlying economy or financial markets.