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US Treasury Yield Curve (updated daily)

Updated: 07/19/2024

What is Yield Curve?

According to Investopedia, the yield curve graphs the relationship between bond yields and bond maturity. As bonds with longer maturities usually carry higher risk, such bonds have higher yields than the bonds with shorter maturities. Due to this, a normal yield curve reflects increasing bond yields as maturity increases. However, the yield curve can sometimes become flat or inverted. The left graph selects three different time periods to show the three different yield curve shapes: April 2021 shows the normal upward sloping yield curve, May 2007 shows a flat yield curve, and August 2000 shows an inverted yield curve.

Inverted Yield Curve

* The grey zones indicate US recessions.

According to the current yield spread, the yield curve is now inverted. This may indicate economic recession.

An inverted yield curve occurs when yields on short-term bonds rise above the yields on longer-term bonds of the same credit quality, which has proven to be a relatively reliable indicator of an economic recession. The inverted yield curve can be observed when the yield spread between long-term yield and short-term yield is less than zero, as shown in the left two graphs.

The gray bars throughout the charts indicate the past U.S. recessions since 1967. A quick look at the “Historical Treasury Yield Spread (10Y-1Y)” graph suggests that historically, an economic recession generally follows once the yield spread drops below 0% (the red Y-axis). This is especially true for recessions during the late 1900s. The yield spread reached an all-time low of -3.10% around April 1980, during the economic recession of the early 1980s.

Historical Yield Curve

Historical Treasury Yield vs. S&P 500 P/E

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