The yield on the 10-year note ended February 14, 2025 at 4.47%. Meanwhile, the 2-year note ended at 4.26% and the 30-year note ended at 4.69%.
The chart below overlays the daily performance of several Treasury bonds, starting from the pre-recession equity market peaks, along with the Federal Funds Rate (FFR) since 2007.
This next table shows the highs and lows of yields and the Federal Funds Rate (FFR) since 2007.
A Long-Term Look at the 10-Year Treasury Yield
Here is a long-term view of the 10-year yield starting in 1965, well before the 1973 oil embargo that triggered the era of 'stagflation' (economic stagnation coupled with inflation)
Inverted Yield Curve
The next chart displays the latest 10-2 spread. Typically, the spread turns negative for a period before rising again prior to recessions, as illustrated in the four recessions shown on this chart. For this reason, the 10-2 spread is widely considered a reliable leading indicator for recessions. The lead time between a negative spread and the onset of a recession varies, with recessions beginning anywhere from 18 to 92 weeks after the spread goes negative.
One false positive is seen in 1998, where the spread briefly went negative without leading to a recession. In the case of the 2009 recession, the spread went negative multiple times before rising again. Most recently, the spread was continuously negative from July 5, 2022, to August 26, 2024. The last time the spread was negative was on September 5, 2024.
If we consider the first negative spread date as the starting point, the average lead time to a recession is 48 weeks, or about eleven months. If we instead use the last positive spread date before a recession, the average lead time is 18.5 weeks, or about 4.25 months.
For another perspective on the yield curve, the 10-3mo spread below uses an even shorter-term maturity. The lead time to recessions based on this spread (after it turns negative) ranges from 34 to 69 weeks. Like the 10-2 spread, we see the same false positive in 1998, as well as multiple instances of the spread turning negative before rising again ahead of the 2009 recession. Most recently, the spread was continuously negative from October 25, 2022, to December 12, 2024.
If we consider the first negative spread date as the starting point, the average lead time to a recession is 48 weeks, or about eleven months. If we instead use the last positive spread date after the spread had been negative, the average lead time is 13 weeks, or about three months.
The 30-Year Fixed Rate Mortgage
The latest Freddie Mac Weekly Primary Mortgage Market Survey put the 30-year fixed rate at 6.87%. Here is a long look back of the 30-year fixed-rate mortgage average, which began in April of 1971.
Now let's see the 10-year against the S&P 500 with some notes on Federal Reserve intervention. Fed policy has been a major influence on market behavior.
For a long-term view of weekly Treasury yields, also focusing on the 10-year, see our latest Treasury Yields in Perspective update.
ETFs associated with Treasuries include: Vanguard 0-3 Month Treasury Bill ETF (VBIL), Vanguard Intermediate-Term Treasury ETF (VGIT), and Vanguard Long-Term Treasury ETF (VGLT).