WThe three bars show the last 3 weeks for this indicator, oldest left to newest right. Bar height reflects each reading relative to the other two — the tallest is the highest of the three, the shortest the lowest.
Historical context: Currently in the 69th percentile of all historical readings.
What this means right now: CP rate is within normal range for the current rate environment. The rate level alone does not signal stress — check the CP-Tbill spread for the funding stress signal.
90-Day AA CP Rate (Financial) · Daily · 1997–2026
Grey areas = NBER recessions · Scroll to read · zoom and pan in Expand
Monthly values
90-Day AA CP Rate (Financial) — the last 12 months
Every month's reading, with the band the heatmap gives it. The chart above shows the same series in full.
Month
Value
Band
Sep 2026
3.90%
Within normal range
Aug 2026
3.83%
Within normal range
Jul 2026
3.88%
Within normal range
Jun 2026
3.93%
Within normal range
May 2026
3.74%
Within normal range
Apr 2026
3.81%
Within normal range
Month-end readings of the same series the chart shows, from dcpf3m. Values are the current record, not point-in-time: a month that has since been revised shows its revised value.
What is the CP Rate (3-Month)?
The 90-Day AA Financial Commercial Paper rate (FRED: DCPF3M) measures the interest rate that large, highly-rated (AA) financial institutions pay to borrow money for 90 days via commercial paper. Commercial paper is a short-term, unsecured promissory note — essentially an IOU issued by corporations and financial firms to fund their day-to-day operations.
Financial commercial paper is a critical funding instrument for banks, broker-dealers, money market funds, and other financial intermediaries. When this market functions normally, large firms can borrow short-term at rates close to the risk-free Treasury rate. When stress hits — as it did during the 2008 crisis — the CP market can seize up entirely, threatening the funding of financial firms that depend on daily rollovers.
Important context: This indicator displays the raw rate level, which primarily tracks the Fed Funds rate. A high CP rate in a high-rate environment is NOT a stress signal — it simply reflects tight monetary policy. The analytically meaningful stress signal is the CP-Tbill spread: the premium financial firms pay above risk-free T-bills (built as a companion indicator). This cell is displayed for completeness and as the raw input to that spread calculation.
How We Color-Code the CP Rate (3-Month)
Our heatmap colors each indicator based on historically significant thresholds:
≤ 5.5%
Normal range — rate level reflects current monetary policy environment, not funding stress
> 5.5%
Historically elevated — only seen briefly during the 2007–08 funding crisis; rate alone does not confirm stress without checking the CP-Tbill spread
Historical Extremes — What Happened Next?
When this indicator reaches extreme levels, history shows consistent patterns:
2007-09-102007–08 Funding Crisis Onset
5.26%
CP rates spiked as the subprime mortgage crisis began to contaminate money markets. Financial firms faced difficulty rolling over CP as investors pulled back. The rate level alone was misleading — the key signal was the widening spread over T-bills, which exploded to record levels.
2021-09-14ZIRP Era Trough
0.08%
Near-zero rate reflecting the Fed's zero interest rate policy. Financial firms could fund at effectively zero cost. Historically low levels contributed to the extraordinary leverage and risk-taking of the 2020–2021 asset bubble.
2023-05-04Post-Hike Cycle Peak
5.15%
Rate rose with the Fed's 525bp hiking cycle — but the CP-Tbill spread remained narrow, confirming this was a policy-driven rate increase, not funding stress.
Investor Checklist — Current Reading
Based on the current CP Rate (3-Month) reading of 3.90% (Neutral):
ℹRate level reflects monetary policy cycle — check CP-Tbill spread for the stress signal
✓Compare to Fed Funds target: if CP rate is close to Fed Funds, funding markets are functioning normally
Frequently Asked Questions
Why does this cell mostly show neutral?
Because the raw CP rate level is not a stress indicator on its own — it primarily tracks the Fed Funds rate. A rate of 5% during a 5.25-5.5% Fed Funds period is completely normal. The stress signal lives in the CP-Tbill spread: the premium financial firms pay above risk-free T-bills. When that spread widens, it means financial firms are being charged more than the risk-free rate — a true funding-stress signal. That companion spread is built as a separate indicator.
What is commercial paper and why does it matter?
Commercial paper is a short-term, unsecured debt instrument — essentially an IOU issued for periods of a few days to 270 days. Financial firms use it as a key funding tool, issuing new CP daily or weekly to finance longer-term assets. Because it's unsecured and short-term, investors demand higher yields when they're uncertain about the issuer's health. During the 2008 crisis, the CP market nearly ceased functioning — the Fed created the Commercial Paper Funding Facility (CPFF) to backstop it.
What happened to CP markets in 2008?
After Lehman Brothers filed for bankruptcy in September 2008, the Reserve Primary Fund (a major money market fund) "broke the buck" due to Lehman CP exposure, triggering a run on money market funds. As funds stopped buying new CP, financial firms could not roll over their short-term funding — threatening to freeze global credit markets within days. The Fed's Commercial Paper Funding Facility (CPFF) directly purchased 3-month CP from eligible issuers, providing a backstop that restored market function within weeks.
What is the difference between financial and non-financial CP?
Financial CP (DCPF3M) is issued by banks, broker-dealers, insurance companies, and other financial firms. Non-financial CP is issued by corporations like GE, IBM, or retailers. Financial CP tends to be more rate-sensitive and a better gauge of financial system stress since financial firms have more complex funding structures and greater leverage. Both markets seized in 2008; financial CP was the more acute problem.