For those seeking shelter on the short end of the curve, the instruments with some of the best yields may also be the instruments with the least amount of risk- a somewhat unusual situation in the bond markets.
According to Bloomberg, spreads currently show 3 year Aa2 rated industrials at +146, with 3 year Aa2 rated financials at +275. However, when one looks to the CD market, they'll see 3 year CDs at +220 or so...cheaper than AA2 rated industrials and within 50bps or so of the financial paper.
CDs? Boring old CDs? Yup, boring old, FDIC insured, certificates of deposit are yielding more than Aa2 rated industrials...something to consider next time you are looking on the short end of the curve.