From ACT Wiki
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, such as 3-month US dollar LIBOR
The greater the TED spread, the greater the measure of credit risk on the banks in the interbank market.