Rates · Updated daily · Figures to 27 Aug 2026
Does the Yield curve really predict recessions?
If you've heard that a recession signal is "flashing", this is almost certainly the chart they meant. The yield curve (the gap between what the US government pays to borrow for ten years and for two) sits at +0.47pp as of 27 Aug 2026 - here's the whole record since 1976, so you can judge its reputation yourself.
Recession warnings are exhausting because you can't tell which ones to take seriously - and this chart is behind more of them than any other. When the line goes below zero (short-term borrowing costing more than long-term, which is backwards), the warnings start. Before the next one reaches you, here's every week of the thing itself since 1976, so you know what's being pointed at.
So, what are we looking at, exactly?
One line: the interest rate on the 10-year US Treasury bond minus the rate on the 2-year. Normally it's positive - lenders want more for locking money away longer. When it goes negative, markets are betting that rates will be cut in the future, and rates usually get cut because something has gone wrong. That's the whole mechanism behind the reputation.
The whole curve, today
The chart above tracks one gap; here's everything it's a summary of. Each row is what the US government pays to borrow for that long, as of yesterday's close - read down the column and you're looking at the actual "curve". A year ago the shape was different, and the change column shows where it moved. One more spread worth knowing: the 10-year minus the 3-month - the version the New York Fed's own recession model runs on - stands at +0.83pp today.
| Borrowing for | Today | A year ago | Change |
|---|---|---|---|
| 1 month | 3.81% | 4.42% | −0.61pp |
| 3 months | 3.84% | 4.26% | −0.42pp |
| 6 months | 3.94% | 4.04% | −0.10pp |
| 1 year | 4.04% | 3.83% | +0.21pp |
| 2 years | 4.20% | 3.59% | +0.61pp |
| 5 years | 4.38% | 3.69% | +0.69pp |
| 10 years | 4.67% | 4.24% | +0.43pp |
| 30 years | 5.19% | 4.91% | +0.28pp |
Time this curve has spent inverted since 1976
16% of all weeks
The longest unbroken stretch below zero in this record began in 2022 and ran 112 weeks. Length matters: a curve that dips under for a week is noise, one that stays under for years is a market holding a view.
Calculated from the chart aboveThe most recent negative reading was the week of 23 Aug 2024. Historically, the nervous moment isn't the inversion - it's the steep climb back out, which tends to happen when rate cuts arrive in a hurry.
Calculated from the chart aboveHow good is its record, really?
Better than almost any other single indicator, and worse than its fans suggest. The New York Fed, which has studied this longer than anyone, keeps a running history: inversions have come before every US recession of the past half-century, with lead times anywhere from several months to two years. What the curve cannot tell you is when, how deep, or whether this time the mechanism has changed - and after the 2022-24 inversion, the longest on record, that last question is open.
What this chart can't tell you
An inversion is a forecast made by bond traders, not a law of physics - it can be wrong, early, or distorted by things that have nothing to do with recession odds (central banks buying bonds moves this line too). The headline spread here is the latest daily close; the long chart plots weekly closes, so its right edge can sit a few days behind the number at the top. Either way, each reading is just the latest vote in a market that repositions every day.
Further reading
All of our numbers come from live, free sources - today's spread and the full curve straight from the Treasury's daily rates, published every trading day, with the long weekly history via FRED. This page updates as the data does.
If you want to dig deeper, the New York Fed's yield-curve FAQ is the standard reference on the recession record - and the copy button under our chart takes the chart with its source attached.