1-Year Treasury Constant Maturity Minus Federal Funds Rate
T1YFF • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
-0.41
Year-over-Year Change
64.00%
Date Range
10/6/2021 - 8/5/2025
Summary
The 1-Year Treasury Constant Maturity Minus Federal Funds Rate is a key spread indicator that measures the difference between short-term government bond yields and the Federal Reserve's benchmark interest rate. This metric provides insights into market expectations of future economic conditions and potential monetary policy shifts.
Analysis & Context
This economic indicator provides valuable insights into current market conditions and economic trends. The data is updated regularly by the Federal Reserve and represents one of the most reliable sources for economic analysis.
Understanding this metric helps economists, policymakers, and investors make informed decisions about economic conditions and future trends. The interactive chart above allows you to explore historical patterns and identify key trends over time.
About This Dataset
This economic indicator represents the yield spread between a 1-year Treasury security and the federal funds rate, which economists use to assess market sentiment and potential economic turning points. The spread can signal potential recession risks, market liquidity conditions, and investor expectations about future interest rate movements.
Methodology
The data is calculated by subtracting the current federal funds rate from the 1-year Treasury constant maturity rate, typically reported on a daily and monthly basis by the Federal Reserve.
Historical Context
Policymakers and investors use this spread as a critical tool for understanding market expectations, potential economic slowdowns, and monetary policy effectiveness.
Key Facts
- A negative spread can indicate potential economic recession risks
- The metric helps investors and policymakers assess market expectations
- Changes in this spread can signal shifts in monetary policy sentiment
FAQs
Q: What does a negative spread indicate?
A: A negative spread suggests market expectations of potential economic slowdown or upcoming monetary policy changes. It often precedes recessionary periods.
Q: How frequently is this data updated?
A: The Federal Reserve updates this data daily, with monthly aggregated reports available through economic databases like FRED.
Q: Why do investors track this spread?
A: Investors use this spread to gauge market sentiment, potential economic turning points, and make informed investment decisions about future economic conditions.
Q: How does this relate to monetary policy?
A: The spread provides insights into market expectations about future Federal Reserve interest rate decisions and overall economic health.
Q: What are the limitations of this indicator?
A: While informative, this spread should not be used in isolation and is most effective when combined with other economic indicators and comprehensive analysis.
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Citation
U.S. Federal Reserve, 1-Year Treasury Constant Maturity Minus Federal Funds Rate [T1YFF], retrieved from FRED.
Last Checked: 8/1/2025