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Money and Financial Markets

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The yield curve has steepened since last month, but this change represents more than a bounce-back from the summer’s exceptionally low long-term rates; current yields show an increase over April and May as well. The 10-year, three-month spread, often cited as a predictor of future economic growth, stands at a robust 350 basis points (bp), up from 325 last month and 277 last year. Other spreads also look promising. The TED spread—the difference between eurodollar deposits and Treasury bonds, widely thought to reflect concern over international tensions—remains quite low by recent historical standards.

Suggested citation: "Money and Financial Markets," Federal Reserve Bank of Cleveland, Economic Trends, no. 03-09, pp. 05-07, 09.01.2003.

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