#ETFWartch

An inverted yield curve is when longer-term Treasury yields are lower than their shorter term counterparts. 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