Term Premium on a 2 Year Zero Coupon Bond
This dataset tracks term premium on a 2 year zero coupon bond over time.
Latest Value
0.05
Year-over-Year Change
-51.10%
Date Range
1/2/1990 - 8/1/2025
Summary
The Term Premium on a 2 Year Zero Coupon Bond measures the extra yield investors demand for holding a longer-term bond rather than a series of shorter-term bonds. It provides insights into market expectations and risk aversion.
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 compensation investors require for the additional risk of holding a 2-year zero-coupon bond instead of a series of shorter-term risk-free securities. It is used by economists and policymakers to analyze fixed income markets and gauge investor sentiment.
Methodology
The data is calculated by the Federal Reserve using a model that decomposes Treasury yields into expected short-term rates and term premia.
Historical Context
The term premium is relevant for understanding monetary policy transmission and asset price dynamics.
Key Facts
- The term premium averaged 0.94% from 1961 to 2022.
- Term premia tend to rise when the economic outlook is uncertain.
- Higher term premia can signal tighter financial conditions.
FAQs
Q: What does this economic trend measure?
A: The Term Premium on a 2 Year Zero Coupon Bond measures the extra yield investors demand for holding a longer-term bond rather than a series of shorter-term bonds.
Q: Why is this trend relevant for users or analysts?
A: This indicator provides insights into market expectations and risk aversion, which is useful for economists and policymakers analyzing fixed income markets and the transmission of monetary policy.
Q: How is this data collected or calculated?
A: The data is calculated by the Federal Reserve using a model that decomposes Treasury yields into expected short-term rates and term premia.
Q: How is this trend used in economic policy?
A: The term premium is relevant for understanding monetary policy transmission and asset price dynamics, as it reflects investor sentiment and compensation for risk.
Q: Are there update delays or limitations?
A: The data is published by the Federal Reserve and may be subject to the same update schedule and limitations as other FRED series.
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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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Term Premium on a 6 Year Zero Coupon Bond
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Citation
U.S. Federal Reserve, Term Premium on a 2 Year Zero Coupon Bond (THREEFYTP2), retrieved from FRED.