Historical Trend
| Date | Value |
|---|---|
| 2026-04-04 | 3.7% |
| 2026-03-28 | 4.0% |
| 2026-03-14 | 4.0% |
| 2026-03-07 | 4.0% |
| 2026-02 | 4.0% |
| 2026-01 | 4.2% |
| 2025-12 | 4.3% |
| 2025-11 | 4.1% |
| 2025-10 | 4.1% |
What This Means for Business
The 2-year yield at 3.71% — well below the current fed funds rate of 4.50% — signals that markets expect the Fed to cut rates. The wider this gap, the more aggressively markets expect easing. For CFOs, short-term borrowing costs may decline sooner than long-term rates, favoring shorter-duration financing strategies.
About 2Y Treasury
The 2-year Treasury yield reflects market expectations for short-term interest rates over the next two years. It is the most sensitive government bond to Federal Reserve policy changes.
Methodology
Like all Treasury yields, the 2-year rate is determined by auction prices and secondary market trading. It is especially sensitive to Fed guidance, employment data, and inflation reports because of its short maturity.
Related Indicators
Frequently Asked Questions
What does it mean when the 2-year yield is below the fed funds rate?
When the 2-year yield is significantly below the fed funds rate, the bond market is pricing in rate cuts. The 2-year yield essentially represents the expected average of the fed funds rate over the next two years. A 2-year yield of 3.71% vs. a fed funds rate of 4.50% implies markets expect meaningful rate reductions.