Description
The United States 3-Month Treasury Yield is released by the U.S. Department of the Treasury and represents the annualized return on the 3-month Treasury bill issued by the government to raise short-term capital. As a short-term interest rate, the 3-month Treasury yield is often viewed as a key indicator of market liquidity and the direction of monetary policy, and it is highly sensitive to overall economic activity.
When the Federal Reserve (Fed) implements tightening monetary policy, short-term interest rates typically rise, leading to an increase in the 3-month Treasury yield. Conversely, when the Fed adopts an accommodative monetary policy, short-term rates decrease, pushing the 3-month Treasury yield lower. Due to its short-term nature, the 3-month Treasury yield is also widely used to gauge market expectations for the future path of the federal funds rate.