Using the US 2-Year Treasury as a Predictor for the Fed Funds Rate

Since 1996, the 2-Year Treasury has been a good predictor for the path of the Fed Funds Rate.

Here using the Federal Reserve Bank of St. Louis monthly data, we see that the Effective Fed Funds Rate follow the 2-Year CMT in rate runups in 1999, 2004–2006, 2016–2018 and now 2021–2022. Keep your eyes on the 2 Year.

Paul Mangione
Fort Schuyler Advisors
www.ftschuyler.com

#bonds #bondmarket #bondmarkets #rates #ratehike #ratehikes #inflation #economy #economics #interestrates #interestrate #treasury #UST #federalreserve #fed #fedfunds #business #technology #innovation #data

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