What is Yield Curve?
The yield curve is a line plotting U.S. Treasury yields from the shortest maturity (1-month bills) to the longest (30-year bonds). Its shape summarizes the market's expectations for future growth, inflation, and Fed policy — a steep curve points to expansion, a flat or inverted curve to potential slowdown.
Live data: 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
Federal Reserve Economic Data (FRED) — · Daily · 3,074 observations
Most recent observation: 0.55 Percent as of April 17, 2026.
Understanding Yield Curve
The yield curve is a plot of U.S. Treasury yields against their maturities — 1-month, 3-month, 6-month, 1-year, 2-year, 5-year, 10-year, 30-year. Its shape at any moment reflects market expectations for future short-term rates, inflation, growth, and term premium.
A normal curve slopes up: longer maturities pay more because investors demand compensation for tying up money longer. A flat curve signals uncertainty about the growth outlook. An inverted curve — where long rates fall below short rates — has historically preceded every U.S. recession since 1955, often by 6–24 months. The most-watched inversion measure is 10-year minus 2-year; the Fed also tracks 10-year minus 3-month.
The curve inverted in 2022 and stayed inverted through 2024 — the longest inversion on record. The expected recession has been delayed or dodged, driving active debate about whether this time is different (fiscal stimulus, QT mechanics, post-COVID structural changes) or whether the lag is just longer than typical.
How Yield Curve is calculated
The Treasury publishes daily constant-maturity yields for standard maturities. The 10y–2y spread is simply the 10-year yield minus the 2-year yield, published daily on FRED as T10Y2Y. The 10y–3m version is T10Y3M. Plotting all maturities produces the curve itself.
Historical context
Notable inversions: 1973 (before 1973–75 recession), 1980 (before 1980 recession), 1989 (before 1990–91 recession), 2000 (before 2001 recession), 2006–07 (before 2008 recession), 2019 briefly (before 2020 COVID recession), and the 2022–24 inversion — the deepest and longest since the early 1980s.
Frequently asked questions
Why do investors accept lower long-term yields when the curve inverts?
Because they expect short-term rates to fall in the future — likely because growth is slowing or the Fed is about to cut. Locking in a longer maturity now avoids reinvesting at lower rates later. The depth of inversion reflects how strongly the market expects that rate-cut scenario.
How long before a recession does the curve usually invert?
Historically 6 to 24 months. The 2006 inversion led the 2008 recession by about 18 months; the 2000 inversion led the 2001 recession by about 10 months. The 2022–24 inversion is on track to be the longest-leading inversion ever if a recession ultimately follows.