1M T-Bill Spread vs Fed Rate

1M T-Bill Spread vs Fed Rate

circle Fed Target Rate and the circle spread (the difference) with the 1-month treasury bill rate.

The Federal Reserve uses the federal funds rate to control inflation and stabilize the economy. The 1-month T-bill rate is a short-term interest rate that is closely tied to the federal funds rate.

When the 1-month T-bill rate is higher than the federal funds rate, it is called an inversion. Such an inversion has historically been viewed as an indicator of a pending economic recession.

There is limited evidence available to show how Bitcoin would perform in a recessionary environment. Bitcoin price would likely struggle in short-term major market sell offs, but may perform well in prolonged recessionary periods, should central banks be forced to provide finance stimulus packages that increase the monetary supply. As Bitcoin is a hard asset that cannot be inflated ad-hoc, such market conditions would likely make Bitcoin an attractive asset to investors.