Rates Indicator
Yield Curve Spread (10Y - 2Y)
Updated 2026-04-04 · Daily · Source: Federal Reserve
Historical Trend
| Date | Value |
|---|---|
| 2026-04-04 | 0.4pp |
| 2026-03-28 | 0.3pp |
| 2026-03-14 | 0.3pp |
| 2026-03-07 | 0.3pp |
| 2026-02 | 0.2pp |
| 2026-01 | 0.3pp |
| 2025-12 | 0.3pp |
| 2025-11 | 0.1pp |
| 2025-10 | 0.2pp |
What This Means for Business
The yield curve has un-inverted to +0.41 percentage points after being inverted for much of 2023-2024. Historically, the yield curve un-inverting and steepening often occurs just before a recession starts — the recession signal is not the inversion itself, but the re-steepening. For executives, this is a watch-closely moment: the economy may be entering a transition period.
About Yield Curve
The yield curve spread measures the difference between the 10-year and 2-year Treasury yields. When positive (normal), longer-term bonds pay more. When negative (inverted), it historically signals recession risk.
Methodology
Simply calculated as: 10-Year Treasury Yield minus 2-Year Treasury Yield. A positive spread is 'normal' (investors demand more for lending longer). An inverted curve (negative spread) has preceded every U.S. recession since 1955, with only one false signal.
Related Indicators
Frequently Asked Questions
Is an inverted yield curve still a reliable recession predictor?
The yield curve has inverted before every U.S. recession since 1955, with a lead time of 6-24 months. However, it produced a false signal in the mid-1990s. The current situation is nuanced: the curve was deeply inverted in 2023-2024 but the economy avoided recession. Some economists argue quantitative easing distorted the signal. The re-steepening phase, which we're in now, has historically been when recessions actually begin.
What causes the yield curve to invert?
Inversion occurs when short-term rates exceed long-term rates, typically because the Fed has raised short-term rates to fight inflation while long-term rates decline on expectations of future economic weakness. It reflects the market's belief that the Fed will eventually need to cut rates due to an economic slowdown.