Instantaneous Forward Term Premium 5 Years Hence
THREEFFTP5 • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
0.35
Year-over-Year Change
-24.00%
Date Range
10/4/2021 - 8/1/2025
Summary
The Instantaneous Forward Term Premium 5 Years Hence measures the expected extra yield investors require to hold a 5-year Treasury bond instead of a series of shorter-term Treasuries. This provides insights into market expectations and risk perceptions.
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 forward rate premium metric indicates the compensation investors demand for the additional interest rate risk of holding a longer-maturity bond. It is used by economists and policymakers to assess market sentiment and anticipate future monetary policy changes.
Methodology
The data is calculated by the Federal Reserve based on Treasury yield curve modeling.
Historical Context
Trends in the 5-year forward term premium offer signals about the bond market's risk outlook and expectations for the Federal Reserve's policy path.
Key Facts
- The 5-year forward term premium has averaged 0.66% since 1990.
- Term premia tend to rise when the economic outlook is uncertain.
- Declining term premia can indicate expectations of low future short-term rates.
FAQs
Q: What does this economic trend measure?
A: The Instantaneous Forward Term Premium 5 Years Hence measures the extra yield investors require to hold a 5-year Treasury bond instead of a series of shorter-term Treasuries.
Q: Why is this trend relevant for users or analysts?
A: This metric provides insights into market expectations and risk perceptions, which is useful for economists and policymakers assessing the bond market's outlook and anticipating future monetary policy changes.
Q: How is this data collected or calculated?
A: The data is calculated by the Federal Reserve based on Treasury yield curve modeling.
Q: How is this trend used in economic policy?
A: Trends in the 5-year forward term premium offer signals about the bond market's risk outlook and expectations for the Federal Reserve's policy path, which is relevant for policymakers and market participants.
Q: Are there update delays or limitations?
A: The data is published with a lag, and may be subject to revisions based on changes in the underlying Treasury yield curve.
Similar THREEFFTP Trends
Fitted Instantaneous Forward Rate 8 Years Hence
THREEFF8
Fitted Yield on a 4 Year Zero Coupon Bond
THREEFY4
Fitted Instantaneous Forward Rate 2 Years Hence
THREEFF2
Fitted Yield on a 9 Year Zero Coupon Bond
THREEFY9
Fitted Instantaneous Forward Rate 10 Years Hence
THREEFF10
Instantaneous Forward Term Premium 9 Years Hence
THREEFFTP9
Citation
U.S. Federal Reserve, Instantaneous Forward Term Premium 5 Years Hence (THREEFFTP5), retrieved from FRED.