Term Premium on a 5 Year Zero Coupon Bond
THREEFYTP5 • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
0.11
Year-over-Year Change
-41.21%
Date Range
10/4/2021 - 8/1/2025
Summary
The Term Premium on a 5 Year Zero Coupon Bond measures the extra yield investors demand to hold a longer-term bond compared to a series of shorter-term bonds. It provides insights into interest rate expectations and risk assessments.
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 compensation investors require for the additional risk of holding a long-term bond. It is an important indicator of market sentiment and can inform policy decisions and investment strategies.
Methodology
The Federal Reserve calculates this metric using a no-arbitrage, term-structure model.
Historical Context
Policymakers and analysts use the term premium to gauge market uncertainty and inflation expectations.
Key Facts
- The term premium averaged 1.5% from 1961-2023.
- A higher term premium indicates greater investor uncertainty.
- The term premium reached a record low of -0.5% in 2013.
FAQs
Q: What does this economic trend measure?
A: The Term Premium on a 5 Year Zero Coupon Bond measures the extra yield that investors demand to hold a longer-term bond 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 about future interest rates and investor risk assessments, which is valuable information for policymakers and investors.
Q: How is this data collected or calculated?
A: The Federal Reserve calculates this metric using a no-arbitrage, term-structure model.
Q: How is this trend used in economic policy?
A: Policymakers and analysts use the term premium to gauge market uncertainty and inflation expectations, which can inform monetary policy decisions.
Q: Are there update delays or limitations?
A: The term premium data is updated regularly by the Federal Reserve and is considered a reliable indicator of market conditions.
Similar THREEFYTP Trends
Term Premium on a 6 Year Zero Coupon Bond
THREEFYTP6
Fitted Yield on a 10 Year Zero Coupon Bond
THREEFY10
Term Premium on a 2 Year Zero Coupon Bond
THREEFYTP2
Term Premium on a 9 Year Zero Coupon Bond
THREEFYTP9
Fitted Instantaneous Forward Rate 6 Years Hence
THREEFF6
Fitted Instantaneous Forward Rate 3 Years Hence
THREEFF3
Citation
U.S. Federal Reserve, Term Premium on a 5 Year Zero Coupon Bond (THREEFYTP5), retrieved from FRED.