TED Spread
Definition
Treasuries Over Euro Dollar Spread. Wall Street term for the gap between interest rates (yields) on the US government securities (treasury bills) and the dollars-deposits held outside of the US (eurodollars). Futures contracts based on TED spread are actively traded on the futures markets by speculators who bet on the narrowing or widening of the gap. It is also used as an indicator of investor confidence in the US federal government finances and the US financial system: a narrow spread indicates high confidence, and a wide spread reflects diminished confidence.
TED Spread is in the Banking, Commerce & Finance, Investing and Securities & Futures Trading subjects.
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