Skip to content
Subscriber Only

Key Fed Yield Gauge Points to Rate Cuts for First Time Since 2008

  • Gap between current and forward T-bill rates turns negative
  • Past fears of easing were ‘more often than not’ validated
Bloomberg business news
Pimco's Crescenzi Sees 'Very Strong Case' for Fed to Pause in March
Updated on

Some of the most accurate gauges of economic health are pricing in lower Fed rates for the first time in more than a decade.

The little-known near-term forward spread, which reflects the difference between the forward rate implied by Treasury bills six quarters from now and the current three-month yield, fell into negative territory on Wednesday for the first time since March 2008. Two-year yields dipped below those on one-year paper in December.