Track the US Treasury yield curve in real-time. The 2Y-10Y spread has predicted 7 of the last 8 recessions with an average lead time of 14 months.
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The yield curve shows the relationship between Treasury bond yields and their maturities. Under normal economic conditions, longer-term bonds pay higher yields to compensate investors for inflation risk and uncertainty. When the curve "inverts" — meaning short-term yields exceed long-term yields — it signals that investors expect economic weakness ahead.
The spread between 2-year and 10-year Treasury yields is one of the most closely watched recession indicators on Wall Street. When the 2-year yield exceeds the 10-year yield (producing a negative spread), investors are signaling they expect the Federal Reserve to cut rates in the future — typically in response to economic contraction.
Since 1970, every recession except one (1973) was preceded by a yield curve inversion. However, the timing varies significantly — recessions have started anywhere from 10 to 24 months after the initial inversion. There has also been one "fakeout" inversion (1998) that did not lead to recession within 24 months.
This tool uses official Treasury yield data from the Federal Reserve Economic Data (FRED), specifically the DGS2 and DGS10 series. Data is updated daily on market days. Recession dates are sourced from the National Bureau of Economic Research (NBER).
