3-Month Treasury Constant Maturity Minus Federal Funds Rate
T3MFF • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
0.01
Year-over-Year Change
-85.71%
Date Range
10/6/2021 - 8/5/2025
Summary
The 3-Month Treasury Constant Maturity Minus Federal Funds Rate is a key spread indicator that measures the difference between short-term government bond yields and the overnight lending rate. This metric provides insights into market expectations, potential economic shifts, and the relative cost of borrowing across different financial instruments.
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 3-month Treasury securities and the federal funds rate, which economists use to assess market sentiment and potential recessionary signals. A negative spread often suggests market expectations of economic slowdown or potential monetary policy adjustments.
Methodology
The data is calculated by subtracting the effective federal funds rate from the 3-month 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 indicator of financial market conditions, potential economic turning points, and underlying monetary policy expectations.
Key Facts
- A negative spread can signal potential economic recession
- Reflects market expectations about future interest rates
- Used by economists and investors to assess financial market conditions
FAQs
Q: What does a negative spread indicate?
A: A negative spread suggests market expectations of potential economic slowdown or anticipated monetary policy changes. It often precedes recessionary periods.
Q: How frequently is this data updated?
A: The data is typically updated daily and compiled into monthly reports by the Federal Reserve.
Q: Why do investors track this spread?
A: Investors use this spread to gauge market sentiment, potential economic shifts, and to make informed investment decisions about risk and potential returns.
Q: How does this relate to monetary policy?
A: The spread provides insights into market expectations about future Federal Reserve actions and potential changes in interest rates.
Q: What are the limitations of this indicator?
A: While informative, this spread should not be used in isolation and is most effective when analyzed alongside other economic indicators.
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Citation
U.S. Federal Reserve, 3-Month Treasury Constant Maturity Minus Federal Funds Rate [T3MFF], retrieved from FRED.
Last Checked: 8/1/2025