MARKETCRASH.NET
Live indicator · Federal Reserve data

Yield Curve Inversion — 10-2 Year Treasury Spread

An inversion of the yield curve came before every US recession since 1950. When this chart goes below zero, short-term Treasuries pay more than long-term ones.

Yield Curve

US Treasury yield curve spread (10Y-2Y). Negative values indicate inversion, often predicting recession.

Thresholds: Negative ≤-0.3 • Warning ≤0.2 • Positive >0.2

POSITIVE

Today's reading sits at the 36.9th percentile of 603 months since 1976.

Current Value
0.40%
3-month Change
0
3-month % Change
0%

Why this can crash the market

Banks borrow short and lend long. When short rates sit above long rates, that business loses money and lending slows. Credit is what the US economy runs on: companies that cannot roll over debt cut investment first, then jobs, then earnings. Falling earnings reprice every stock. This signal came before every US recession since 1950, but it never says when.

Historical Data

The last three years • Source: FRED T10Y2Y, daily

Yield Curve Spread
0.40▼ 0.01 (2.44%) vs prevSep 9, 2026

What Is the Yield Curve?

The yield curve plots US Treasury rates across maturities. Longer bonds normally pay more. When short-term rates go above long-term rates, the curve is inverted.

The 10Y-2Y Spread

  • Spread = 10-Year Treasury Rate - 2-Year Rate
  • Normal spread: 1-3% (positive, healthy)
  • Flat curve: 0-0.5% (slowdown warning)
  • Inverted: Below 0% (recession signal)

Why Inversion Matters

  • Banks borrow short-term, lend long-term
  • Inversion crushes bank profit margins
  • Credit tightens, lending slows down
  • Economic slowdown follows within 12-18 months

The Signal Before Every Recession Since 1950

The curve inverted before the 2001 recession, the 2008 financial crisis and the 2020 downturn. The average lead time was 12 to 18 months.

2006 Inversion → 2008 Crisis

The curve inverted in August 2006. The Great Recession began in December 2007, 16 months later. The S&P 500 fell 57%.

2019 Inversion → 2020 Recession

A short inversion in August 2019 came 7 months before the COVID recession. COVID was the trigger, but the economy was already weakening.

How to Read This Chart

The red dashed line marks zero. When the blue line falls below it, the curve is inverted. A deeper and longer inversion is a stronger signal. In past cycles the recession came within months after the curve returned above zero.

Get told when the curve crosses

One email a week when the score moved, with the current 10Y-2Y spread and the other five indicators.

At most one email a week, and only in weeks something actually moved. No account, one click to unsubscribe, and the address is never shared.

Explore Related Indicators

Buffett Indicator

Market cap to GDP — Warren Buffett's favorite valuation metric

Shiller PE Ratio

CAPE ratio — 10-year smoothed market valuation

US Dollar Index

DXY tracking the strength of the US dollar

Money Supply (M2)

M2 money supply growth — liquidity driving asset prices

Real Interest Rates

Inflation-adjusted rates driving borrowing costs

Fear and Greed Index

Market sentiment from volatility, credit spreads, momentum and safe-haven demand

Methodology

Every formula, source series and threshold behind these numbers

Yield curve data sourced from the Federal Reserve. For educational purposes only. Not investment advice.