Last updated: 2026-09-05 · See live macro indicators →
The yield curve plots the interest rates (yields) of US Treasury bonds at different maturities — from 1 month to 30 years. In a normal economic environment, long-term bonds pay higher yields than short-term bonds. When this relationship inverts — short-term yields exceed long-term yields — it signals that investors expect economic conditions to deteriorate.
The 2s10s spread is the difference between the 10-year Treasury yield and the 2-year Treasury yield. It is the most widely watched yield curve metric:
Formula: 2s10s = 10-year yield − 2-year yield
The yield curve inversion has preceded every US recession for the past 50+ years:
The average lead time between the initial inversion and the onset of recession is approximately 12–18 months. The curve often re-steepens shortly before the recession actually begins.
High-yield credit spreads measure the extra yield investors demand to hold “junk” bonds over US Treasuries. Historically, HY spreads above 600–700bps have coincided with recessionary credit conditions. Watching HY spreads alongside the yield curve gives a more complete picture of financial stress.
Advantage Intel tracks the 2s10s spread, high-yield credit spreads, and other macro indicators
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It means short-term Treasury yields exceed long-term yields — the opposite of normal. The bond market is pricing in weaker future growth. Historically precedes every US recession with ~12–18 months lead time.
The 10-year Treasury yield minus the 2-year yield. Positive = normal economy. Negative = inverted curve. Near zero = flattening, watch carefully. Advantage Intel tracks this daily alongside HY credit spreads.
Yes — the 2s10s inversion has a perfect track record predicting US recessions over the past 50+ years, though with variable lead times of 6–24 months. The curve often re-steepens shortly before the recession begins.