The TED spread is the difference between the three-month LIBOR rate and the three-month Treasury bill rate.
The TED spread is commonly used as a measure of credit risk since US Treasury bills are considered risk-free.
the TED spread often widens during periods of economic crisis, as the risk of default increases; the spread narrows when the economy is more stable and there is less risk of default.
Flattening of the yield curve is when short-term and long-term bonds do not undergo noticeable changes in rates. This makes long-term bonds less attractive to investors.
The Treasury Current Yield Curve graphically shows the current yield versus maturity of the most recently traded US Treasury securities and is the primary benchmark used in the pricing of fixed income securities.
Taper antrum refers to the 2013 collective reactionary panic that caused US Treasury yields to spike after investors learned that the Federal Reserve was slowly putting a brake on its quantitative easing (QE) program.
A bond’s zero volatility spread tells the investor the present value of the bond plus its cash flows at specific points on the Treasury curve where cash flows are generated.
The Bank Note Swap Rate (BBSW) is a short-term interest rate used as a benchmark for valuing Australian dollar derivatives and securities, primarily floating rate bonds.
A basis point is a standard measure of interest rates and other percentages in finance.
– One basis point is equal to 1/100th of 1%, or 0.01% (and 0.0001 in decimal).