Daily Treasury rates across 5 key maturities. Track the 10Y-2Y spread, monitor yield curve inversions, and spot recession signals — updated daily from US Treasury data.
What is the yield curve telling us?
The yield curve plots US government bond interest rates from 3-month to 30-year maturities. A normal upward-sloping curve signals economic confidence. When the curve inverts — short-term rates exceeding long-term rates — it has preceded every US recession since 1970. The 10-year minus 2-year spread is the single most watched metric for recession risk.
The US Treasury yield curve represents the cost of borrowing for the US government across different time horizons. Short-term bills (3-month, 6-month) reflect current Federal Reserve policy rates, while long-term bonds (10-year, 30-year) reflect the market's expectations for future growth, inflation, and monetary policy.
In a healthy economy, the curve slopes upward — investors demand higher yields for locking up their money for longer periods. This term premium compensates for the additional risk of inflation and uncertainty over longer time horizons. When investors are willing to accept lower long-term rates, it signals they expect economic weakness and anticipate the Fed will need to cut rates.
The curve is not a single line but a collection of discrete points. Each maturity trades independently in the bond market, meaning the 2-year yield can move in one direction while the 10-year moves in another. These relative movements between maturities carry more information than any single yield in isolation.
Yield curve inversions occur because bond market participants are forward-looking. When traders and institutional investors believe the economy is heading into a slowdown, they buy long-term Treasuries as a safe haven. This surge in demand pushes long-term yields down. Simultaneously, the Federal Reserve may still be raising or holding short-term rates to fight inflation, keeping the front end elevated.
The result: short-term yields exceed long-term yields. This inversion has preceded every US recession since 1970, though the lead time varies from 6 to 18 months. The 2019 inversion preceded the 2020 recession. The 2022-2023 inversion — one of the deepest and longest on record — reflects the most aggressive Fed hiking cycle in decades.
Not every inversion leads to a deep recession. Brief or shallow inversions sometimes resolve without significant economic damage. The depth (how negative the spread becomes) and duration (how long it stays inverted) both matter. Deeper, longer inversions historically correlate with more severe downturns.
The 10Y-2Y spread is the difference between the 10-year and 2-year Treasury yields, expressed in basis points (hundredths of a percentage point). It is the most widely watched yield curve metric because it captures the tension between current Fed policy (reflected in the 2-year) and long-term economic expectations (reflected in the 10-year).
A positive spread (e.g., +150bp) indicates a normal, healthy curve. A spread near zero is called a flat curve and signals uncertainty. A negative spread (e.g., -80bp) is an inversion and is the classic recession warning signal. Traders, economists, and central bankers all monitor this spread closely.
Other spreads matter too. The 10Y-3M spread is preferred by some economists (including many at the Federal Reserve) because the 3-month yield more directly reflects the current Fed Funds rate. The 30Y-5Y spread captures longer-term structural expectations. Each tells a slightly different story.
For macro research: Track the 10Y-2Y spread alongside GDP growth and employment data. An inverted curve followed by a re-steepening (uninversion) has historically coincided with the onset of recession — the economy tends to weaken after the curve normalises, not during the inversion itself.
For fixed income: The curve shape drives relative value opportunities. A steepening curve favours long-duration bonds. A flattening curve favours short-duration or cash-like instruments. Barbell strategies exploit the differential between short and long maturities.
For equity investors: Yield curve inversions have preceded major equity drawdowns, but timing varies significantly. The equity market often continues to rally for months after an inversion before the recession materialises. Use the curve as a risk management input, not a timing tool.
Economic expansion, moderate growth expectations. The historical average 10Y-2Y spread is approximately +130 basis points. Banks profit from borrowing short and lending long.
Transition zone between expansion and contraction expectations. Often occurs late in a hiking cycle as the Fed tightens policy into a slowing economy. Markets are uncertain.
Recession warning. Every US recession since 1970 has been preceded by an inversion. Severity correlates with depth and duration. The 2022-23 inversion reached -108bp, the deepest since the early 1980s.
Daily constant-maturity Treasury yields sourced from the US Treasury Department via Alpha Vantage. Maturities tracked: 3-month, 2-year, 5-year, 10-year, and 30-year. Spreads are computed as simple differences between maturities. Data is updated each trading day after market close. Yield curve charts are rendered using Quadesto's monotone convex interpolation for smooth curve fitting between discrete maturity points.
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