US Treasury yield curve.
Normal, flat, or inverted.
A graph of interest rates across maturities. Most of the time, longer bonds pay more than short ones. When the curve inverts (short rates above long rates), markets are pricing in lower future rates, which historically signals a coming recessionrecessionA period when the overall economy shrinks instead of grows. The usual rule of thumb: two consecutive three-month stretches where the country produces less than the stretch before, while unemployment rises.. Adjust the slider to see how your yield expectation shifts the curve.
The question it answersIs the Treasury yield curve signaling a recession?
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The defaults reflect a recent snapshot of US Treasury yields. Live rates change daily; pull the current curve from the Treasury before relying on the exact numbers.
Yield curve inversions (10y minus 3m or 10y minus 2y going negative) have preceded every US recession since 1969 by 6 to 18 months verify×DON'T TRUST, VERIFYClaim: US yield curve inversions (10y vs 3m or 10y vs 2y) have preceded every recession since 1969.Verify at: FRED 10y-3m spread ↗ · NY Fed yield-curve recession FAQ ↗ Source 1 in the list belowThe NY Fed publishes recession-probability models built on the spread. Not every inversion has caused a recession, but the false-positive rate is low..
How to read this curve
- Normal (upward sloping): longer maturities pay more. The market expects rates to stay roughly here or to rise. Banks are profitable (borrow short, lend long), credit expands, the economy hums.
- Flat: short and long rates are similar. The market is uncertain about direction. A flat curve often precedes inversion or steepening.
- Inverted (downward sloping): short rates above long rates. The market is pricing in future rate cuts, usually because investors expect the Fed to ease in response to a weakening economy. Inversions have preceded every US recession since 1969 by 6 to 18 months.
- Two spreads are watched: 10y minus 2y (the most popular reference) and 10y minus 3m (the cleanest historical recession signal per NY Fed research).
- Inversion is a signal, not a certainty. The lag varies. False positives exist, though they are rare. The signal is "the risk environment shifted," not "sell now."
Not financial advice. Live rates change daily; verify before committing.
HOW THIS IS CALCULATED
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Where to go from here
Sources
Verify badges in the text link to these sources. Figures, rates and rules change: check each source’s date before acting on it.
- Federal Reserve Bank of St. Louis (FRED), FRED 10y-3m spread ↩
Calculators are educational estimates, not financial advice. Disclosures · How pages are reviewed