High-grade corporate bonds are offering some of the fattest yields in a year, but investors chasing those returns should read the fine print. An ICE BofA index tracking the debt of the largest, most creditworthy U.S. companies reached 5.3% last week, its highest since roughly this time last year. On the surface, that looks like an attractive entry point for fixed-income investors.

The math looks even better when you strip out inflation. With the 10-year inflation break-even rate sitting around 2.4%, those high-grade corporate bonds could deliver real, inflation-adjusted returns approaching 3% over the next decade. That is a meaningful premium over what Treasuries currently offer, which explains the appetite.

The catch is that yields near perfection often mean credit risk is underpriced. Investors jumping in may be locking in today's generous rates without fully accounting for what could go wrong if economic conditions shift. ICE BofA data shows the market has priced these bonds close to perfection, leaving little margin for error.