Figure 2. Spread between interest rates on thirty-year and five-year Treasury bonds, 1977-2006. Data plotted as a curve. Units are percentage points. As shown in the figure, since late 1982, longer-term rates (in this case, the average annual yield on thirty-year Treasury securities) have almost always exceeded shorter-term rates (in this case, the average annual yield on five-year Treasuries), a pattern illustrated by the positive difference in these rates over time. The figure shows three principal "peaks"--in 1992 (spread of 1.96), 2003 (2.05), and 2004 (2.07). In contrast, from 1977 to late 1982, the difference between the rates was frequently negative. The figure shows two principal "troughs"--in 1980 (negative 1.13) and 1981 (negative 1.39).

Note: After March 2002, the spread is between twenty-year and five-year Treasury bonds.

Source: Federal Financial Institutions Examination Council, "FFIEC Rate Spread Calculator," www.ffiec.gov/ratespread/default.aspx.