Instantaneous Forward Term Premium 2 Years Hence
THREEFFTP2 • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
0.04
Year-over-Year Change
-67.62%
Date Range
10/4/2021 - 8/1/2025
Summary
The Instantaneous Forward Term Premium 2 Years Hence measures the compensation demanded by investors to hold long-term bonds relative to short-term bonds. This metric provides insight 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 economic indicator represents the difference between the instantaneous forward rate 2 years in the future and the expected short-term interest rate 2 years hence. It reflects the premium investors require to hold longer-term bonds as opposed to rolling over shorter-term bonds.
Methodology
The data is calculated by the Federal Reserve using Treasury yield curve information.
Historical Context
Policymakers and analysts use this metric to gauge market sentiment and expectations about the future path of interest rates.
Key Facts
- The term premium has been persistently low since the Great Recession.
- Negative term premiums indicate a greater demand for long-term bonds.
- The term premium is an important input for the yield curve and forward guidance.
FAQs
Q: What does this economic trend measure?
A: The Instantaneous Forward Term Premium 2 Years Hence measures the compensation investors demand to hold long-term bonds instead of repeatedly rolling over short-term bonds.
Q: Why is this trend relevant for users or analysts?
A: This metric provides insight into market expectations and risk perceptions, which is crucial information for policymakers and investors.
Q: How is this data collected or calculated?
A: The Federal Reserve calculates this indicator using information from the Treasury yield curve.
Q: How is this trend used in economic policy?
A: Policymakers and analysts use this metric to gauge market sentiment and expectations about the future path of interest rates, which informs monetary policy decisions.
Q: Are there update delays or limitations?
A: The data is published with a short lag and may be subject to revisions by the Federal Reserve.
Related Trends
Fitted Instantaneous Forward Rate 7 Years Hence
THREEFF7
Term Premium on a 10 Year Zero Coupon Bond
THREEFYTP10
Term Premium on a 5 Year Zero Coupon Bond
THREEFYTP5
Term Premium on a 1 Year Zero Coupon Bond
THREEFYTP1
Term Premium on a 3 Year Zero Coupon Bond
THREEFYTP3
Fitted Instantaneous Forward Rate 8 Years Hence
THREEFF8
Citation
U.S. Federal Reserve, Instantaneous Forward Term Premium 2 Years Hence (THREEFFTP2), retrieved from FRED.