The shape of the Treasury curve is the market’s own summary of what money will cost over the horizon most allocations are sized against. It is quoted constantly and read carelessly, so it is worth putting the levels next to the spread.
| Maturity | Yield | |
|---|---|---|
| 3-month bill | 3.71% | |
| 2-year note | 3.84% | |
| 10-year note | 4.35% | |
| 30-year bond | 4.91% | |
| 10-year less 2-year | +0.51 pts |
Ten-year minus two-year Treasury spread
Daily, percentage points. Below zero is an inverted curve.
Source: Federal Reserve Bank of St. Louis (FRED). Computed by Institutional Asset Journal.
Spreads say what risk costs
A credit spread is the compensation demanded for lending to a borrower who might not pay. When it is tight, risk is cheap and capital is looking for somewhere to go, which is the environment in which allocations to unfamiliar assets get approved. When it widens, the approvals stop before the narrative does.
How this was measured
- Series are taken from the Federal Reserve Bank of St. Louis via its public CSV endpoint, which needs no key and returns the full published history. Treasury yields are constant-maturity par yields, not the yield on any particular security. The ten-year inflation-indexed series is the real yield used here as a hurdle rate; the breakeven is the difference between it and the nominal. Option-adjusted spreads are ICE BofA index levels. A piece dated one day reads the most recent observation on or before the day before, because these series publish with a lag, and every figure names the date it belongs to. Observations are not carried forward across holidays.
