What the 10-year minus 3-month Treasury spread measures
This version of the yield curve subtracts the 3-month Treasury yield from the 10-year Treasury yield, both at constant maturity, averaged over each month since 1982. A positive spread is normal: investors want extra yield for lending for longer. A negative spread – an inverted yield curve – means short-term money pays more than ten-year money.
How to read this chart
Every US recession since the late 1960s was preceded by an inversion of this spread, typically six to eighteen months ahead. That track record is why the New York Fed’s recession model uses it and why many Fed economists prefer it to the 10-year minus 2-year spread. The signal is not perfect: the lead time varies widely, and the curve usually turns positive again just before or during a recession as the Fed cuts short-term rates.
The latest reading in context
- At 0.90%, the latest reading is above its 5-year average of −0.10% and above its 10-year average of 0.38%.
- Of all 538 monthly readings since January 1982, 32% were lower than today’s and 68% were higher.
- Direction: unchanged over the past month; up 0.28 points over the past six months; up 0.82 points over the past year.
- The highest value on record is 4.15% (September 1982, 44 years ago); the lowest is −1.73% (May 2023, 3 years ago).
- The full history spans 5 US recessions, shaded grey on the chart.
Why it matters
The 3-month yield reflects where the Fed has set policy now, while the 10-year yield reflects expectations for growth, inflation and rates over the next decade. When markets expect the Fed to cut rates sharply – usually because a slowdown is coming – long yields fall below short ones. Inversions also squeeze banks, which borrow short and lend long, and can tighten credit.
What moves the 10-year minus 3-month Treasury spread
- Fed rate hikes, which push the 3-month yield up
- Growth and inflation expectations, which drive the 10-year yield
- Demand for safe long-term bonds in times of stress
- Fed bond purchases or sales (quantitative easing and tightening)
Key moments in its history
- 1989Inverted ahead of the 1990–91 recession.
- 2000Inverted months before the 2001 recession.
- 2006–2007Inverted well before the 2008 financial crisis.
- 2019A brief inversion before the 2020 recession, which was triggered by the pandemic.
- Late 2022–2024The longest inversion since this series began, as the Fed raised rates to fight inflation.
Yield Curve (10Y − 3M) data tables
Average by decade
| Decade | Average | High | Low |
|---|---|---|---|
| 2020s (so far) | 0.17% | 1.98% | −1.73% |
| 2010s | 1.83% | 3.68% | −0.36% |
| 2000s | 1.70% | 3.68% | −0.70% |
| 1990s | 1.67% | 3.67% | 0.07% |
| 1980s | 1.94% | 4.15% | −0.16% |
Last 12 months
| Period | Value | Change |
|---|---|---|
| Oct 2026 | 0.90% | 0.00 pts |
| Sep 2026 | 0.90% | +0.09 pts |
| Aug 2026 | 0.81% | +0.08 pts |
| Jul 2026 | 0.73% | +0.07 pts |
| Jun 2026 | 0.66% | −0.14 pts |
| May 2026 | 0.80% | +0.18 pts |
| Apr 2026 | 0.62% | +0.09 pts |
| Mar 2026 | 0.53% | +0.09 pts |
| Feb 2026 | 0.44% | −0.11 pts |
| Jan 2026 | 0.55% | +0.09 pts |
| Dec 2025 | 0.46% | +0.30 pts |
| Nov 2025 | 0.16% | +0.08 pts |
Monthly values. Decade figures are averages of the monthly values in each decade. The complete history is available as a CSV file.
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Yield Curve (10Y − 3M): questions and answers
Why use the 3-month yield instead of the 2-year?
The 3-month yield moves almost one for one with the Fed’s policy rate, so the spread compares current policy with long-term expectations. Research at the Federal Reserve and elsewhere has found it a somewhat more reliable recession signal than the 10-year minus 2-year spread.
Does an inverted yield curve cause recessions?
Not directly. It mostly reflects the market’s expectation that the Fed will have to cut rates, although a long inversion can reduce bank lending and add to a slowdown.
How long after an inversion does a recession start?
Historically anywhere from about six months to two years, which makes the signal useful as a warning but not as a timing tool.
Where does the data on this chart come from?
From the Board of Governors of the Federal Reserve System. ChartWidgets downloads the series (T10Y3M) from FRED, the Federal Reserve Bank of St. Louis database, and checks for new releases every day. The last update was on November 4, 2026.