The Ted Spread

The attention of most people during the current financial crisis has been on the stock market. While the crisis is reflected in the price of stocks, the real crisis is in the credit markets. Economists look at the Ted Spread, which shows the yield spread between U.S. Treasuries and inter-bank loans. The greater spread reveals the fear that banks have in lending to each other. For a more complete explanation, click here. Normally, the Ted spread is 10 to 50 basis points or .1 to .5 on the graph, for a current read click here.