Instantaneous Forward Term Premium 10 Years Hence
THREEFFTP10 • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
1.29
Year-over-Year Change
-10.51%
Date Range
10/4/2021 - 8/1/2025
Summary
The Instantaneous Forward Term Premium 10 Years Hence measures the compensation investors demand for holding long-term bonds rather than a series of short-term bonds. It provides insights into market expectations and risk preferences.
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 the 10-year forward rate and the expected average of future short-term interest rates over the same 10-year horizon. It is used by economists and policymakers to gauge market sentiment and inform monetary policy decisions.
Methodology
The Federal Reserve calculates this metric using the yield curve and model-based estimates of expected future short rates.
Historical Context
The forward term premium is closely watched as a barometer of market conditions and inflation expectations.
Key Facts
- The forward term premium has averaged 0.56% since 1990.
- It reached a high of 2.32% in October 2018.
- The metric turned negative during the 2008 financial crisis.
FAQs
Q: What does this economic trend measure?
A: The Instantaneous Forward Term Premium 10 Years Hence measures the extra yield or 'term premium' that investors demand for holding long-term bonds rather than rolling over a series of short-term bonds.
Q: Why is this trend relevant for users or analysts?
A: This metric provides insights into market expectations and risk preferences, which are important for understanding the bond market, inflation outlook, and the stance of monetary policy.
Q: How is this data collected or calculated?
A: The Federal Reserve calculates this measure using the yield curve and model-based estimates of expected future short-term interest rates.
Q: How is this trend used in economic policy?
A: The forward term premium is closely watched by policymakers and analysts as an indicator of market conditions and inflation expectations, which informs monetary policy decisions.
Q: Are there update delays or limitations?
A: The data is published with a short lag, and the model-based estimates may be subject to some uncertainty.
Similar THREEFFTP Trends
Term Premium on a 7 Year Zero Coupon Bond
THREEFYTP7
Fitted Instantaneous Forward Rate 4 Years Hence
THREEFF4
Instantaneous Forward Term Premium 4 Years Hence
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Fitted Yield on a 9 Year Zero Coupon Bond
THREEFY9
Instantaneous Forward Term Premium 7 Years Hence
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Term Premium on a 8 Year Zero Coupon Bond
THREEFYTP8
Citation
U.S. Federal Reserve, Instantaneous Forward Term Premium 10 Years Hence (THREEFFTP10), retrieved from FRED.