Laura Adams, MBA, Financial Writer  |  Reviewed by Offain Gunasekara  |  Updated: April 19, 2026

The U.S. Treasury yield curve is the most important benchmark in fixed-income markets, influencing everything from mortgage rates to savings account yields. This page tracks all eight Treasury maturities from 3-month to 30-year, monitors the key spread indicators that signal economic health or recession risk, and reports market-based inflation expectations updated nightly from FRED data.

What Is the Treasury Yield Curve?

The Treasury yield curve is a graph that plots the yields of U.S. Treasury securities across different maturity lengths — from three months to 30 years. It shows the relationship between the interest rate (yield) that the U.S. government pays to borrow money and the length of time until the loan matures. Treasury yields are considered the safest borrowing rates in the world because they are backed by the full faith and credit of the U.S. government.

The curve is important because it serves as a benchmark for all other interest rates in the economy. Mortgage lenders, auto loan issuers, credit card companies, and savings account providers all use Treasury yields as a baseline, then add risk premiums on top. A change in Treasury yields ripples through the entire financial system, affecting the costs and returns that consumers face on everything from mortgages to savings accounts to student loans.

Normal vs Inverted vs Flat — What Each Shape Means

The yield curve can take three main shapes, each with different economic implications.

A normal (upward-sloping) curve occurs when long-term Treasury yields are higher than short-term yields. This is the most common shape and typically occurs during economic expansions. Investors demand higher yields for lending money over longer periods because there is more uncertainty and inflation risk far into the future. A normal curve is associated with steady economic growth, rising corporate profits, and low recession risk. This is the current shape, with the 10-year yielding 46 basis points above the 2-year.

An inverted curve occurs when short-term yields exceed long-term yields, creating a downward-sloping curve. This is rare and counterintuitive because it means investors are willing to accept lower returns for longer-term lending. Inversions typically signal recession risk because they suggest the market expects the economy to weaken or the Fed to cut rates in the future. The inverted curve of 2022-2024 preceded the regional banking crisis and economic slowdown in 2023. The 2019 inversion preceded the COVID-19 recession of 2020. The 2006-2007 inversion preceded the 2008 financial crisis. However, inversions do not guarantee a recession will occur.

A flat curve occurs when short-term and long-term yields are nearly equal, typically during transition periods between economic expansions and contractions. Flat curves are less common and suggest economic uncertainty. They can precede either an inversion or a steepening, depending on which direction rates move next.

Yield Curve Shapes: Historical Comparison

Shape	Spread (10Y-2Y)	Historical Signal	What Happened Next
Normal	>0.0%	Growth	Economic expansion, rising corporate profits, low recession risk
Inverted	<0.0%	Caution	Recession typically follows within 12-18 months; 2008, 2020, 2023 examples
Flat	≈0.0%	Transition	Uncertainty; curve typically steepens or inverts next

Why the 10-Year / 2-Year Spread Matters

The 10-year / 2-year spread (T10Y2Y) is the most closely watched indicator of the yield curve’s shape because these two maturities capture the medium and long-term portions of the curve that are most sensitive to economic expectations. The 10-year is influenced by long-term inflation expectations and growth forecasts, while the 2-year is anchored more closely to Federal Reserve policy expectations.

An inverted 10-2 spread has an excellent track record as a recession predictor. Historically, the inversion of this spread preceded the last five recessions: the 2000-2001 recession, the 2007-2008 financial crisis, the 2020 COVID recession, the regional banking crisis of 2023, and economic slowdowns in 2024. However, the lag between inversion and recession is typically 12-18 months, so an inversion today does not mean a recession tomorrow.

Other spread indicators matter too. The 10Y-3M spread (10-year vs 3-month Treasury) is also predictive, with inversions historically preceding recessions. Currently at +0.69%, this spread remains solidly positive and indicates low near-term recession risk. As long as the 10-year yield remains above the 2-year and 3-month rates, the economy is expected to continue growing at a moderate pace.

How Treasury Yields Affect the Rates You Pay

Treasury yields are the foundation for all other interest rates in the economy. Lenders use Treasury rates as a risk-free baseline, then add premiums to account for credit risk, liquidity, and their own profit margins. Understanding which Treasury maturity influences which consumer product helps you anticipate how rate changes will affect your financial situation.

Treasury Maturity	Current Rate	Consumer Product	Typical Spread
3-Month (3.73%)	3.73%	Savings accounts, money market accounts	0.0% – 0.3%
Fed Funds Rate	3.25% – 3.75%	Prime rate (6.75%), credit cards, HELOCs	+3.0%
2-Year (3.84%)	3.84%	2-year CDs, auto loans, adjustable mortgages	+1.0% – +2.0%
5-Year (3.96%)	3.96%	5-year CDs, student loans, ARM resets	+0.5% – +1.5%
10-Year (4.33%)	4.33%	30-year mortgages, 10-year bonds	+1.5% – +2.5%
30-Year (4.89%)	4.89%	15-year mortgages, corporate bonds	+1.0% – +2.0%

Breakeven Inflation Rates Explained

Breakeven inflation rates (also called inflation breakevens or TIPS spreads) represent the market’s expectation for average annual inflation over a given time horizon. They are calculated as the difference between the yield on a nominal Treasury security and the yield on a Treasury Inflation-Protected Security (TIPS) of the same maturity.

For example, if a 10-year Treasury yields 4.33% and a 10-year TIPS yields 1.99%, the 10-year breakeven inflation rate is approximately 2.34%. This means the market is priced for inflation to average 2.34% per year over the next decade. If actual inflation comes in higher than this rate, TIPS investors win. If inflation comes in lower, nominal Treasury investors win.

The current readings — 5-year breakeven at 2.56% and 10-year breakeven at 2.34% — suggest the market expects inflation to remain above the Federal Reserve’s 2% long-term target in the near term but gradually return to target over a decade. This is a constructive inflation expectation that supports the Fed’s ability to eventually reach price stability without causing severe economic damage.

Frequently Asked Questions

What is the Treasury yield curve?

The Treasury yield curve plots the yields of U.S. Treasury securities across maturities from three months to 30 years. It shows the relationship between the interest rate the government pays to borrow and the length of the loan. Because Treasuries are backed by the U.S. government, they are considered the safest borrowing rates in the world and serve as a benchmark for all other interest rates in the economy.

Is the yield curve inverted right now?

No, the yield curve is currently normal and upward-sloping. The 10-year Treasury (4.33%) yields 46 basis points above the 2-year (3.84%), creating a positive spread. A normal curve indicates healthy economic expectations and low near-term recession risk. The curve was inverted from June 2022 through October 2024, but has been positive since November 2024.

How does the yield curve predict recessions?

When the yield curve inverts (short-term yields exceed long-term yields), it signals that the market expects economic weakness ahead. An inverted yield curve preceded the 2000-2001 recession, the 2007-2008 financial crisis, the 2020 COVID recession, and the 2023 banking crisis. The lag between inversion and recession typically ranges from 12 to 18 months, but this is not guaranteed — inversions can be false signals. The 10Y-2Y spread is the most reliable recession indicator.

What does a steepening yield curve mean for mortgage rates?

A steepening curve occurs when the spread between long-term and short-term rates widens. When the curve steepens, long-term Treasury yields (like the 10-year) typically rise relative to short-term yields, pushing 30-year mortgage rates higher. However, steepening often occurs during periods of economic growth and rising inflation expectations, which can support economic activity despite higher borrowing costs.

How often is the data on this page updated?

The Treasury yield curve data on this page is updated daily after the Federal Reserve publishes official closing yields. Historical data extends back two years, allowing you to see longer-term trends. The 10Y-2Y spread is calculated daily and reflects the market’s expectations for economic growth and inflation. Check back regularly for the latest market developments.

Should I lock in a fixed rate now or wait for rates to drop?

With the yield curve in normal territory and the 10-year Treasury at 4.33%, long-term borrowing costs are elevated but stable. If you need a mortgage or long-term loan, locking in now protects you from potential rate increases if inflation expectations rise further. However, if the Fed signals additional rate cuts and the curve flattens, shorter-term rates could decline first, benefiting adjustable-rate borrowers. Consider your time horizon and risk tolerance when deciding.

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