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Hickey and Walters (Bespoke) submit: Monday's 70+ basis point drop (120+ at one point) in the yield on 3-Month Treasury Bills makes the difference between the Federal Funds Target Rate and 3-Month Treasury yields by far the highest since at least 1983.

The first chart below highlights their historical yields. Monday's drop in 3-Month yields clearly shows the largest widening of spreads since 1983. The second chart highlights the percentage difference between the two, and as shown, the current spread of 73% is well higher than prior spikes in October '98, September '01 and June '03. All three periods coincided with drops in the Federal Funds Target Rate.

click to enlarge
funds 1

funds 2

Source: Largest Short-Term Bond Spreads Since 1983