5-Year Treasury Constant Maturity Minus Federal Funds Rate
T5YFF • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
-0.56
Year-over-Year Change
51.35%
Date Range
10/6/2021 - 8/5/2025
Summary
The 5-Year Treasury Constant Maturity Minus Federal Funds Rate measures the spread between 5-year Treasury yields and the federal funds rate, indicating market expectations about future economic conditions. This metric provides insights into potential economic shifts, interest rate trajectories, and market sentiment.
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 difference between medium-term government bond yields and the short-term interbank lending rate set by the Federal Reserve. Economists use this spread as a key signal of potential economic turning points, recession probabilities, and market liquidity expectations.
Methodology
The data is calculated by subtracting the effective federal funds rate from the 5-year Treasury constant maturity rate, typically reported on a daily and monthly basis.
Historical Context
Policymakers and investors analyze this spread to assess potential economic transitions, monetary policy effectiveness, and market risk perceptions.
Key Facts
- Negative spread can signal potential economic recession
- Reflects market expectations about future interest rates
- Used by economists and investors for strategic decision-making
FAQs
Q: What does a widening spread indicate?
A: A widening spread typically suggests increasing market uncertainty or expectations of future economic changes. It can signal potential shifts in monetary policy or economic conditions.
Q: How often is this data updated?
A: The T5YFF data is updated daily by the Federal Reserve, with monthly and annual aggregations available for comprehensive analysis.
Q: Why do investors track this spread?
A: Investors use this spread as a predictive tool for economic trends, potential recessions, and to inform investment strategies across different asset classes.
Q: Can this indicator predict economic downturns?
A: Historically, an inverted yield curve (negative spread) has been a reliable predictor of potential economic recessions, though it is not a guaranteed indicator.
Q: What are the limitations of this metric?
A: While informative, this spread should not be used in isolation and requires contextualization with other economic indicators for comprehensive analysis.
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Citation
U.S. Federal Reserve, 5-Year Treasury Constant Maturity Minus Federal Funds Rate [T5YFF], retrieved from FRED.
Last Checked: 8/1/2025