The yield on the 10-year note ended January 17, 2025 at 4.61%. Meanwhile, the 2-year note ended at 4.27% and the 30-year note ended at 4.84%.
Here is a table showing the yields' highs and lows and the FFR since 2007.
The next chart is an overlay of the daily performance of several Treasury bonds since the pre-recession days of equity market peaks along with the Fed funds rate (FFR) since 2007.
A Long-Term Look at the 10-Year Treasury Yield
Here is a long look of the 10-year yield with a start date of 1965, well before the 1973 oil embargo that triggered the era of "stagflation" (economic stagnation with inflation).
Yield Curve
The next chart shows the latest 10-2 spread. Typically, the spread goes negative for a period and then climbs out of the red prior to recessions, as you can see in the four recessions shown on this chart. Thus, it is widely considered a reliable leading indicator for recessions. The lead time for recessions is quite a range - after going negative, recessions have begun anywhere from 18 to 92 weeks later. We also can see a false positive in 1998 where the spread went negative for a short period. For the 2009 recession, the spread went negative a couple of different times before rising. 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 use the first negative spread date as our starting point, the average number of weeks leading up to a recession is 48, or about eleven months. If we use the last positive spread date after being negative before a recession, the average is 18.5 weeks, or 4.25 months.
For another perspective on the yield curve, the 10-3mo spread below utilizes an even shorter-term maturity. The lead time for recessions using this spread (after going negative) ranges from 34 to 69 weeks later. Similar to the 10-2 spread, we can see the same false positive in 1998 and the spread going negative a couple times prior to the 2009 recession before rising. Most recently, the spread was continuously negative from October 25, 2022 to December 12, 2024.
If we use the first negative spread date as our starting point, the average number of weeks leading up to a recession is 48, or about eleven months. If we use the last positive spread date after being negative before a recession, the average is 13 weeks, or 3 months.
The 30-Year Fixed Rate Mortgage
The latest Freddie Mac Weekly Primary Mortgage Market Survey put the 30-year fixed rate at 7.04%. 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: iShares 1-3 Year Treasury Bond ETF (SHY), iShares 7-10 Year Treasury Bond ETF (IEF), and iShares 20+ Year Treasury Bond ETF (TLT).
