3-Month Treasury Bill Minus Federal Funds Rate
TB3SMFFM • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
-0.08
Year-over-Year Change
-38.46%
Date Range
7/1/1954 - 7/1/2025
Summary
The 3-Month Treasury Bill Minus Federal Funds Rate measures the spread between short-term government debt yields and the central bank's benchmark interest rate. This metric provides insights into market expectations of monetary policy and potential economic conditions.
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 spread is a key indicator of financial market sentiment and potential economic stress, often used to assess the likelihood of future monetary policy shifts. Economists and investors closely monitor this metric as a signal of potential economic turning points or financial market tensions.
Methodology
The data is calculated by subtracting the Federal Funds Rate from the 3-Month Treasury Bill rate, typically reported on a percentage basis.
Historical Context
Central banks and financial analysts use this spread to gauge market expectations about future economic conditions and potential recessionary signals.
Key Facts
- Negative spread can signal potential economic slowdown
- Used as a predictive tool for economic recessions
- Reflects market expectations of future interest rates
FAQs
Q: What does a negative spread indicate?
A: A negative spread suggests market expectations of potential economic contraction or upcoming monetary policy changes. It can be a warning sign of potential economic challenges.
Q: How often is this data updated?
A: The data is typically updated daily, reflecting current market conditions and short-term interest rate movements.
Q: Why do investors care about this spread?
A: Investors use this spread as a leading indicator of economic conditions and potential shifts in monetary policy that could impact investment strategies.
Q: How does this relate to Federal Reserve policy?
A: The spread provides insights into market expectations about future Federal Reserve interest rate decisions and overall economic outlook.
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, 3-Month Treasury Bill Minus Federal Funds Rate [TB3SMFFM], retrieved from FRED.
Last Checked: 8/1/2025