MEASURED BY HELIOUS
2s10s +45bp
as of close · live on the rates board
2s10s Spread
The 2s10s spread is the yield on the 10-year Treasury note minus the yield on the 2-year note, quoted in basis points. It is the usual shorthand for the shape of the yield curve. A positive number means the curve slopes up in the normal way, and a negative one means it is inverted.
Traders watch 2s10s because the two legs answer different questions. The 2-year is mostly a bet on where the Fed goes over the next couple of years. The 10-year has that in it too, plus long-run growth, inflation expectations, term premium and supply. So one number ends up carrying the whole cycle. It has inverted before every US recession in recent decades, which is why it gets quoted more than any other recession gauge in finance.
There are two kinds of steepening, and the difference is which end did the work. If the 2s fall faster than the 10s, the market is pricing rate cuts, which is the classic move ahead of an easing cycle. That is bull steepening. If the 10s rise faster instead, it is term premium or supply pressure hitting the long end. That is bear steepening.
Say the 2-year yields 3.95% and the 10-year 4.33%, which puts 2s10s at +38bp. A soft CPI print lands, cut odds jump, and the 2-year rallies 12bp to 3.83% while the 10-year falls only 5bp to 4.28%. The spread has bull-steepened 7bp to +45bp inside an hour, and the front end led it.
On the Helious desk right now
FAQ
What is the 2s10s spread telling me right now?
The 2s10s is the 10-year yield minus the 2-year yield, in basis points. A widening gap is steepening, which normally means the long end is repricing growth, inflation or supply. A narrowing gap is flattening, and that is usually the front end tracking policy. Helious publishes the live level and the current regime, with the time it flipped, on the rates board.
Is a steepening curve bullish or bearish?
It depends which end is moving, which is why the regime matters more than the spread itself. When the front end rallies because cuts are getting priced, you have a bull steepener. When the long end sells off on inflation, supply or term premium, you have a bear steepener, and equities usually feel that one. Helious reads which regime is running right now from the live tape on the rates board.
What is a normal 2s10s level?
Positive, historically, because lenders normally want more yield to lend for longer. A negative 2s10s is an inversion, and it has come before most US recessions, though the lead times are long and variable. See yield curve inversion for how much weight that signal deserves.