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Treasury Yield Curve Spread

Money, Credit and Financial Markets

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The Treasury yield curve spread measures the difference in yield between longer-dated and shorter-dated US Treasury securities, most commonly quoted as the 10-year minus 2-year Treasury spread, and it reflects investors' collective expectations about future interest rates, growth and inflation. An inverted curve, where short-term yields exceed long-term yields, has preceded every US recession since the 1950s with only rare false signals, making the spread one of the most closely watched, if debated, single financial-market indicators of recession risk among economists and market participants.

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