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Is the 10-year/2-year spread worth betting on?

The trend is cyclical and therefore predictable and could possibly be worth betting on. The 10-year/2-year spread refers to the divergence between the 10-year US Treasury bond and the 2-year Treasury note. In normal economic circumstances, the yield on the 10-year should be greater than the 2-year, creating a positive spread.

What is the 10-2 Treasury yield spread?

Upgrade now. 10-2 Year Treasury Yield Spread is at -0.45%, compared to -0.42% the previous market day and -0.74% last year. This is lower than the long term average of 0.88%. The 10-2 Treasury Yield Spread is the difference between the 10 year treasury rate and the 2 year treasury rate.

What is a 10-year minus 2-year Treasury bond spread?

The 10-year minus 2-year Treasury bond spread is generally considered to be an advance warning of severe weakness in the stock market. Negative spreads occurred prior to the recession of the early 1990s, the tech-bubble crash in 2000-2001, and the financial crisis of 2007-2008.

Why is the 10-year/2-year spread so important?

The 10-year/2-year spread has gotten recognition for the fact that it has, in a way, correctly identified each of the previous recessions over the past 40 years before they actually occurred by going negative beforehand. (There have been a few false alarms along the way.)

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