Long Term Perspective
The yield between the 2-year note and the 10-year note reflects changes in the economic environment. When the spread narrows, it reflects potential softening in economic activity -- possibly even recession. Until late October 2001, market players focused on the 30-year bond, but now that the Treasury announced it will no longer issue new long bonds, attention has shifted to the 10-year Treasury note as a benchmark security.

Short Term Perspective
Interest rates hit bottom on June 13 and headed higher ever since. Rates are fluctuating within a trading range as bond investors wonder whether about the strength of the economic expansion and the potential for inflationary pressures. They also worry about the timing of the Fed's first rate hike from the current federal funds rate target of 1 percent.

Alternative Inflation Measures   •   Gold Prices   •   Employment Cost Index   •   Civilian Unemployment Rate

Pool of Available Labor   •   Nonfarm Productivity   •   Treasury Yields   •   Stock Prices   •   Fed Monetary Policy Summary