Federal Reserve Economic Data

The FRED® Blog

The chicken and egg (price) question

The FRED graph above shows the prices of a dozen eggs and a pound of chicken breast. (A previous post graphed price changes for those items.)

Egg prices have been in the news for their stark increases recently. But chicken breast prices not so much, as those prices have been relatively stable. Why the difference in price patterns for products from the same animal?

Economic theory would tell you this: If two goods are substitutes, their prices track each other well, as one can be replaced by the other if one becomes relatively more expensive. But eggs and chicken meat are not substitutes in either production or consumption.

Are they complements? That would mean that, if you eat one, you necessarily eat the other. Only few recipes call for both eggs and chicken meat, so they aren’t complements in consumption. But they could be complements in production: An egg-laying hen can also provide chicken meat. In a case such as this, excess demand for one over the other can lead to a divergence of prices.

But that is not the explanation either. Nowadays, chickens are very specialized. “Broilers” grow in a few weeks before slaughter, while laying hens live for years. The latter have more opportunity to catch diseases, and the current avian flu epidemic is affecting them much more than broilers, which can be replaced quickly. Thus, chicken breast prices are much less affected, if at all, by current circumstances.

How this graph was created: Search FRED for “chicken breast” and click on the first choice. Click on “Edit Graph,” then open the “Add Line” tab, and search for/select the series for eggs. Finally, start the graph in 2006.

Suggested by Christian Zimmermann.

The rising share of student loan debt

Home mortgages are households’ largest source of debt. And since 2010, student loans have been their second-largest source of debt.

The FRED Blog has discussed student loan and household debt before, in relation to overall economic activity. Today, we compare student loan debt with three other categories of consumer credit:

  • Revolving consumer credit, mostly credit card debt (blue area)
  • Automobile loans (green area)
  • Student loans (orange area)
  • Other, non-revolving consumer credit (purple area)

The FRED graph above shows quarterly data on each category from the Board of Governors of the Federal Reserve System. The units are in millions of dollars, but are presented in stacked areas to easily show each category as a percentage of the entire pool of consumer credit.

Data on student loans, as a standalone category of consumer credit, has been reported only since 2006, so we can’t observe the rollout of the Federal Direct Student Loan Program in 1994. But the growing share of student loans, as a fraction of overall consumer credit, is easy to see: It’s risen from 20.6% in 2006 to 35.6% in 2024. Learn even more here.

How this graph was created: Search the alphabetical list of FRED releases for “Z.1 Financial Accounts of the United States” and select “Quarterly: L.222 Consumer Credit.” Select the four series listed under the heading “Memo” naming the types of consumer loans and click “Add to Graph.” Use the “Format” tab to change the graph type to “Area” and the stacking option to “Percent.”

Suggested by Diego Mendez-Carbajo.

The term premium

At its September 2024 meeting, the Federal Open Market Committee (FOMC) cut its target range for the federal funds rate by 50 points, marking the beginning of a new easing cycle. In the months after, the 10-year Treasury yield rose from 3.65% on September 17, 2024, to a recent peak of 4.79% on January 13, 2025.

The FRED graph above shows 10-year Treasury yields for the past decade. An increase in long-term interest rates such as the 10-year Treasury yield is highly unusual at the beginning of a Fed easing cycle.

To investigate this dynamic, we can analyze the term premium: The term premium is the difference in the returns an investor expects to earn from (i) buying and holding long-term debt such as a 10-year Treasury bond and (ii) buying short-term debt and reinvesting it once it reaches maturity, such as buying 1-year bonds and rolling them over into new 1-year bonds every year for 10 years. In other words, it’s the amount of compensation investors demand for the risks inherent in investing in longer-term vs. shorter-term debt.

To compute the term premium, we need to estimate future short-term interest rates. In our second FRED graph, above, we present a term premium measure on a 10-year zero-coupon bond estimated by economists at the Federal Reserve Board. (Note that FRED also has term premia measures for bonds with maturities between 1 and 9 years.)

On January 13, 2025, the 10-year term premium reached its highest level since 2011, surpassing 0.8%. At that time, investors required a rate that was 0.8 percentage points higher to invest in long-term over short-term bonds for the same duration. As of May 2, the term premium stood at 0.5%, up from 0.05% before the September 2024 FOMC meeting. That is, the higher term premium accounts for more than half of the recent rise in 10-year Treasury yields, suggesting investors associate greater risk and uncertainty with investing in longer-term debt.

How these graphs were created: Search FRED for and select “Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, Quoted on an Investment Basis.” For the second graph, search for and select “Term Premium on a 10 Year Zero Coupon Bond.”

Suggested by Brooke Hathhorn and Mark Wright.



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