The average market risk premium in the United States remained at *** percent in 2025. This suggests that the returns that investors expected for their investrments remained the same as the previous year in that country, in exchange for the risk they are exposed to. This premium has hovered between *** and *** percent since 2011. What causes country-specific risk? Risk to investments come from two main sources. First, inflation causes an asset’s price to decrease in real terms. A 100 U.S. dollar investment with three percent inflation is only worth ** U.S. dollars after one year. Investors are also interested in risks of project failure or non-performing loans. The unique U.S. context Analysts have historically considered the United States Treasury to be risk-free. This view has been shifting, but many advisors continue to use treasury yield rates as a risk-free rate. Given the fact that U.S. government securities are available at a variety of terms, this gives investment managers a range of tools for predicting future market developments.

Graph and download economic data for Real Risk Premium (TENEXPCHAREARISPRE) from Jan 1982 to Oct 2025 about premium, real, and USA.

The average market risk premium used in Russia was the highest in 2025, reaching a value of ** percent in that year. The lowest market risk premiums used in that year were in France and Japan, at *** percent respectively.

Market risk premiums (MRP) measure the expected return on investment an investor looks to make. For potential investors looking to add to their portfolio, the perfect scenario for a risk-based investment would be a high rate of return with as small a risk as possible. There are three main concepts to MRPs, including required market risk premiums, historical market risk premiums, and expected market risk premiums. United Kingdom shows little return for risk Europe-wide, Finland had one of the lowest MRP alongside Poland and Germany. Ukraine had average risk premiums of *** percent in 2025. Having a lower market risk premium may seem bad, but for countries such as the UK and Germany where rates have been consistent for several years, it is because the market is stable as an environment for investment. Risk-free rates Risk-free rates are closely associated with market risk premiums and measure the rate of return on an investment with no risk. As there is no risk associated, the rate of return is lower than that of an MRP. Average risk-free rates across Europe are relatively low.

This statistic illustrates the median market risk premium used for selected countries worldwide in 2024. The median market risk premium used in Turkey was the highest and reached a value of **** percent in that year.

The average market risk premium in South Africa increased to *** percent in 2024. Market premium risk represents the difference between return on equities and a risk-free investment, which is normally associated with short-term government bonds. For comparison, the U.S. market premium risk amounted to *** percent in the same year. Risk-free rate Most analysts consider the U.S. treasury rate to be the risk-free rate for the term of their investment, assuming the United States government will not default. Just as consumers in the Unites States get a credit rating, agencies such as Standard & Poor’s rate countries’ credit risks. Using these data, analysts compute the country-specific default risk, which in turn has an influence on the value of risk-free rate. What influences the return on equities? The economic factors such as political stability in a country, inflation rate, level of indebtment, trade deficit and investments have an influence on the activities of companies and their valuation on the stock exchanges. Apart from the economic cycle, the company’s operations itself, which are reflected in the results published in the financial reports, can boost or diminish the stock returns.

United States US: Risk Premium on Lending: Lending Rate Minus Treasury Bill Rate data was reported at 3.186 % pa in 2016. This records a decrease from the previous number of 3.201 % pa for 2015. United States US: Risk Premium on Lending: Lending Rate Minus Treasury Bill Rate data is updated yearly, averaging 2.868 % pa from Dec 1960 (Median) to 2016, with 57 observations. The data reached an all-time high of 4.793 % pa in 1981 and a record low of 0.587 % pa in 1965. United States US: Risk Premium on Lending: Lending Rate Minus Treasury Bill Rate data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s United States – Table US.World Bank.WDI: Interest Rates. Risk premium on lending is the interest rate charged by banks on loans to private sector customers minus the 'risk free' treasury bill interest rate at which short-term government securities are issued or traded in the market. In some countries this spread may be negative, indicating that the market considers its best corporate clients to be lower risk than the government. The terms and conditions attached to lending rates differ by country, however, limiting their comparability.; ; International Monetary Fund, International Financial Statistics database.; ;

The average market risk premium in Canada was *** percent in 2024. This means investors demanded an extra *** Canadian dollars on a 100 Canadian dollar investment. This extra cost should compensate for the risk of an investment based in Canada. What causes risk? As far as country-specific factors are concerned, macroeconomic trends can cause risk. For example, the inflation rate in relation to other countries can change the relative value of an investment. Lower inflation in Canada could weaken the Canadian dollar, reducing the value of Canadian assets in terms of another currency, such as the euro or U.S. dollar. The Canadian context As a country, Canada has a fairly high national debt. Some economists point to this as an increased default risk, since debt servicing can become costly. However, most investors agree that Canada, as an advanced economy, is creditworthy and not at risk of defaulting. A better measure is to look at Canada’s risk premium in the context of interest rates from other countries. These deposit rates can be used as a baseline for the market risk premium of other countries, though they do not include all the factors that have been used to calculate this statistic.

View market daily updates and historical trends for US Corporate BBB Bond Risk Premium. from United States. Source: Bank of America Merrill Lynch. Track e…

Abstract (en): This paper develops a production-based asset pricing model with two types of agents and concentrated ownership of physical capital. A temporary but persistent "distribution shock" causes the income share of capital owners to fluctuate in a procyclical manner, consistent with US data. The concentrated ownership model significantly magnifies the equity risk premium relative to a representative-agent model because the capital owners' consumption is more-strongly linked to volatile dividends from equity. With a steady-state risk aversion coefficient around 4, the model delivers an unleveled equity premium of 3.9 percent relative to short-term bonds and a premium of 1.2 percent relative to long-term bonds. (JEL D31, E13, E25, E32, E44, G12)

Graph and download economic data for Term Premium on a 10 Year Zero Coupon Bond (THREEFYTP10) from 1990-01-02 to 2025-11-21 about term premium, 10-year, bonds, and USA.

The dataset comprises the following series:

01_RI_data_series: Return index series for the 27 companies included in the NASDAQ OMX Renewable Energy Gen (GRNREG) index (source: Datastream). 02_DY_data_series: Dividend yield series for the 27 companies included in the NASDAQ OMX Renewable Energy Gen (GRNREG) index (source: Datastream). 03_MV_data_series: Market value series for the 27 companies included in the NASDAQ OMX Renewable Energy Gen (GRNREG) index (source: Datastream). 04_Exchange_rates: Exchange rates (source: OECD). 05_LCOE: Average Levelized cost of energy for the United States and Europe (source: IRENA (2022)). 06_PriceLCOE_ratio: Energy prices relative to the levelized cost of energy, where energy prices are pool prices compiled from the Nord Pool power market. 07_Risk_free_and_ERP: (i) 10-year German bond yield and 20-year U.S. bond yield, and (ii) equity risk premium for Europe and U.S. (source: Bloomberg). 08_Unlevered_Betas: Unlevered betas for 23 European firms and 11 North-American firms whose activity is focused on the renewable energy sector (source: S&P Capital IQ).

REFERENCES: IRENA, 2022. Renewable Energy Statistics 2022, available at: https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2022/Jul/IRENA_Renewable_energy_statistics_2022.pdf (accessed 12 May 2024).

This dataset compiles national-level municipal bond issuance and pricing statistics for the United States, sourced from the Securities Industry and Financial Markets Association (SIFMA). It includes time-series data on municipal bond issuance volumes, average yields, interest rates, and maturity structures, aggregated on a monthly and annual basis. The dataset provides critical macro-financial context for evaluating subnational debt trends, especially in the context of climate adaptation investments and fiscal resilience. In particular, it supports comparative analysis between local climate-related borrowing (e.g., FEMA-backed projects) and national municipal debt trends, serving as a benchmark for assessing changes in risk premiums, cost of capital, and investor behavior. This file was used to calibrate yield spreads in empirical models evaluating the market response to federally co-funded nature-based infrastructure.

Index Time Series for Franklin Liberty Systematic Style Premia ETF. The frequency of the observation is daily. Moving average series are also typically included. The fund seeks to achieve its investment goal by allocating its assets across two underlying alternative investment strategies, which represent top-down and bottom-up approaches to capturing factor-based risk premia. Through the two strategies, it may invest in or obtain exposure to: (i) equity securities (which may include common stocks and preferred stocks), (ii) debt securities (which may include bonds, notes, debentures, banker's acceptances and commercial paper), (iii) commodity-linked derivative instruments and (iv) currency-related derivative instruments.

This paper develops a model for the forward and spot exchange rate which allows for the presence of a Markov switching risk premium in the forward market and considers the issue of testing the unbiased forward exchange rate (UFER) hypothesis. Using US/UK data, it is shown that the UFER hypothesis cannot be rejected, provided that instrumental variables are used to account for within-regime correlation between explanatory variables and disturbances in the Markov switching model on which the test is based.

A little over half of investors believe the risk premium of seniors housing in the United States will increase in the next 12 months, according to a June 2022 survey. In this case, the risk premium refers to the spread between the risk-free ******* Treasury and seniors housing cap rates. The average United States risk market premium has hovered between *** and *** percent since 2011.

General insurers can provide industry services at a fraction of the potential loss by pooling premiums to pay for losses some policyholders incur. The industry is an indispensable part of risk management in the domestic economy. General insurers derive income from insurance premiums and investing in bonds, stocks and other assets. Most property and casualty premiums are obtained through renewing policies relating to existing risks. Changes in risk exposure and pricing conditions affect remaining premiums. Many consumers view policies as inelastic, although some may choose to decrease consumption of insurance policies should premium prices increase too much. Policy pricing fluctuates between cycles of price-cutting (softening) and price raising (hardening). Over the past five years, revenue has grown at a CAGR of 3.4% to $1,021.1 billion, including an expected 2.1% increase in 2025 alone. Industry profit is also set to climb to 14.2% of revenue in the current year as insurance premiums have climbed and interest income has grown. Industry revenue has benefited from a hardening price cycle during the majority of the current period. Even though volatility at the onset of the period and a high inflationary environment in the latter part of the period hindered the broader economy, demand for industry services was not severely damaged. Net premiums increased for insurers, primarily because of the growth in the house price index and the rise of new car sales have led to higher insurance premiums to protect against potential liabilities. As economic conditions will continue to improve into the outlook period, employment and business activity in the broader economy are expected to increase and promote spending and the need for industry services. The Federal Reserve is anticipated to cut rates further following the recent rate cuts in the latter part of the period which will decrease investment income for P&C insurers, limiting industry revenue growth. Overall, revenue is forecast to grow at a CAGR of 2.0% to $1,126.8 billion over the five years to 2030.

Ten-Year Expected Inflation and Real and Inflation Risk Premia is a part of the Inflation Expectations indicator of the Federal Reserve Bank of Cleveland.

View data of the effective yield of an index of non-investment grade publically issued corporate debt in the U.S.

Overnight Index Swaps (OIS) Market Outlook

According to our latest research, the global Overnight Index Swaps (OIS) market size reached USD 1.42 trillion in 2024, with a robust year-on-year growth rate. The market is projected to expand at a CAGR of 6.8% from 2025 to 2033, reaching an estimated value of USD 2.76 trillion by 2033. This impressive growth trajectory is primarily driven by increasing demand for efficient interest rate risk management solutions, heightened market volatility, and the growing sophistication of financial instruments across global markets. As per our latest research, the OIS market is gaining significant traction due to its critical role in providing transparent and liquid benchmarks for pricing and risk management in the derivatives space.

The first major growth factor in the Overnight Index Swaps market is the rising need for robust risk management tools among financial institutions and corporate treasuries. In an environment marked by fluctuating interest rates and tightening monetary policies, organizations are increasingly turning to OIS contracts to hedge their exposure to overnight funding rates. These swaps offer a transparent and standardized method to manage short-term interest rate risks, which is especially valuable as central banks globally shift towards using overnight rates as benchmarks for monetary policy. The transition from traditional reference rates such as LIBOR to risk-free rates like SOFR, ESTR, and SONIA has further amplified the adoption of OIS, as these instruments are directly linked to the overnight indices, ensuring better alignment with evolving regulatory requirements and market practices.

Another significant driver fueling the OIS market growth is the surge in trading volumes and liquidity in the derivatives market. As market participants seek to optimize their funding costs and capitalize on arbitrage opportunities, OIS contracts have become a preferred choice due to their simplicity, low credit risk, and high degree of standardization. The increased participation of asset managers, hedge funds, and other non-bank financial institutions has contributed to deeper liquidity pools, tighter bid-ask spreads, and enhanced price discovery mechanisms. This, in turn, has attracted more participants, creating a virtuous cycle of liquidity and growth. Additionally, advancements in trading technology, electronic platforms, and clearing mechanisms have streamlined the execution and settlement of OIS transactions, further bolstering market expansion.

A third key growth factor is the evolving regulatory landscape, which has placed a premium on transparency, risk mitigation, and standardized practices in the derivatives market. Regulatory reforms such as the Dodd-Frank Act in the United States and the European Market Infrastructure Regulation (EMIR) in Europe have mandated central clearing and reporting of standardized derivatives contracts, including OIS. These measures have reduced counterparty risk, increased transparency, and fostered greater confidence among market participants. The ongoing shift towards central clearing and the adoption of standardized documentation, such as the ISDA Master Agreement, have made OIS contracts more accessible and attractive to a broader range of end-users, from banks and corporates to asset managers and pension funds.

From a regional perspective, North America and Europe continue to dominate the Overnight Index Swaps market, accounting for the largest share of global trading volumes. This dominance can be attributed to the presence of well-established financial markets, sophisticated regulatory frameworks, and the early adoption of risk-free rate benchmarks. Asia Pacific is rapidly emerging as a key growth region, driven by the liberalization of financial markets, increasing cross-border capital flows, and the adoption of international best practices in risk management. Latin America and the Middle East & Africa are also witnessing gradual growth, supported by financial sector reforms and increased participation from local and international players. The regional dynamics are expected to evolve further as global interest rate cycles diverge and market participants seek new opportunities for hedging and arbitrage.

Instrument Type Analysis

The Instrument Type segment in the Overnight Index Swaps market is primarily categorized into Fixed vs. Floating, Basis Swaps, and Cross-Currency OIS. Fixed vs. Floating