Save US Treasury Yield Spread vs. Real GDP YoY
Long-term treasury yield is an important indicator for inflation. Short-term yield is a good tool to predict the Central bank's policy rate decisions. Spread between 10-year and 2-year yield changes as the economy enters a different phase:
1. Growth phase: spread is small because 2-year yield rises.
2. Slow growth phase: spread turns negative because the Central bank raises interest rate and 2-year yield exceeds 10-year yield.
3. Recession phase: spread widens because the Central bank lowers interest rate to stimulate the economy.
4. Recovery phase: spread remains wide as the Central keeps monetary policy loose.
US Real GDP (SAAR, YoY)2021 Q212.20 %
US 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity2021-10-261.16 %