TED spread

Credit risk.

TED is an acronym for Treasury EuroDollar rate.

TED spread is the difference (spread) in interest rates between:

• US government 3-month borrowing rates, considered effectively risk-free; and
• 3-month interbank interest rates.

The greater the TED spread, the greater the measure of credit risk on the banks in the interbank market.

See also

• Credit risk
• Eurodollars
• Secondary spread
• Spread
• T-Bills