10Y-2Y Yield Curve Spread

## What this measures

This measures the difference in yield between 10-year and 2-year U.S. Treasury constant maturity securities, expressed in percentage points.

## Why it matters

The slope of the yield curve reflects market expectations for growth and monetary policy. A narrowing or inverted spread (where short rates exceed long rates) has historically preceded recessions, signaling tighter credit conditions and reduced confidence in near-term expansion. Organizations use it to assess the risk environment for capital investment, borrowing costs, and revenue visibility.

## How to read it

A positive spread indicates long-term rates exceed short-term rates, the normal condition. A narrowing spread suggests markets expect slower growth or rate cuts ahead. An inverted spread (negative value) signals heightened recession risk and a closing window for capital access.

## What it does not say

It does not forecast the timing or severity of downturns, nor does it reflect corporate credit spreads or the availability of private financing.

## Source

Source is FRED series T10Y2Y, calculated by the Federal Reserve Bank of St. Louis as the difference between 10-year and 2-year Treasury constant maturity rates published by the U.S. Treasury Department. Palanor pulls this series from the FRED API nightly.