Source: U.S. Department of the Treasury
Release: Corporate Bond Yield Curve
The spot rate for any maturity is defined as the yield on a bond that gives a single payment at that maturity. This is called a zero coupon bond. Because high quality zero coupon bonds are not generally available, the HQM methodology computes the spot rates so as to make them consistent with the yields on other high quality bonds. The HQM yield curve uses data from a set of high quality corporate bonds rated AAA, AA, or A that accurately represent the high quality corporate bond market.
The HQM methodology projects yields beyond 30 years maturity out to 100 years maturity to get discount rates for long-dated pension liabilities.
For more information see https://www.treasury.gov/resource-center/economic-policy/corp-bond-yield/Pages/Corp-Yield-Bond-Curve-Papers.aspx
U.S. Department of the Treasury, 23.5-Year High Quality Market (HQM) Corporate Bond Spot Rate [HQMCB23Y6M], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/HQMCB23Y6M, September 27, 2022.