Term Premium on a 10 Year Zero Coupon Bond
This dataset tracks term premium on a 10 year zero coupon bond over time.
Latest Value
0.46
Year-over-Year Change
-18.34%
Date Range
1/2/1990 - 8/1/2025
Summary
The Term Premium on a 10 Year Zero Coupon Bond is a measure of the extra yield investors demand to hold longer-term fixed-income securities. It 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
The term premium represents the additional compensation investors require to hold a longer-term bond rather than a series of shorter-term bonds. This metric is used by economists and policymakers to assess monetary policy, inflation expectations, and market risk sentiment.
Methodology
The term premium is calculated based on the difference between the 10-year zero coupon bond yield and the expected path of future short-term interest rates.
Historical Context
The term premium is an important indicator for central banks and market participants in evaluating monetary policy and financial conditions.
Key Facts
- The term premium has averaged around 1% over the past 30 years.
- A higher term premium signals greater uncertainty and risk aversion in financial markets.
- The term premium declined significantly during the Great Recession and COVID-19 pandemic.
FAQs
Q: What does this economic trend measure?
A: The Term Premium on a 10 Year Zero Coupon Bond measures the extra yield investors demand to hold longer-term fixed-income securities compared to a series of shorter-term bonds.
Q: Why is this trend relevant for users or analysts?
A: The term premium provides insights into market expectations, risk perceptions, and monetary policy, making it a key indicator for economists, policymakers, and investors.
Q: How is this data collected or calculated?
A: The term premium is calculated based on the difference between the 10-year zero coupon bond yield and the expected path of future short-term interest rates.
Q: How is this trend used in economic policy?
A: Central banks and market participants use the term premium to evaluate monetary policy, inflation expectations, and financial conditions.
Q: Are there update delays or limitations?
A: The term premium data is published by the Federal Reserve and may be subject to revisions or delays in data reporting.
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Term Premium on a 1 Year Zero Coupon Bond
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Term Premium on a 4 Year Zero Coupon Bond
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Citation
U.S. Federal Reserve, Term Premium on a 10 Year Zero Coupon Bond (THREEFYTP10), retrieved from FRED.