Definition of ted spread

difference between interest rates on U.S. Treasury bills and Eurodollars. The term Ted refers to Treasuries over Eurodollars.Many traders in the futures markets actively trade the Ted spread, speculating that the difference between U.S. Treasuries and Eurodollars will widen or narrow. The Ted spread also is used as an indicator of confidence in the U.S. government and the general level of fear or confidence in the markets for private financing. A narrow spread indicates confidence in financial markets in general and the U.S. Government in particular. When the spread is wide, confidence is diminished.