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2s10s

The 10-year Treasury yield minus the 2-year yield, the most quoted single measure of yield curve slope.

2s10s condenses the whole curve into one number that fits in a headline. Positive and widening means a normal-yield-curve and usually an economy with room to run. Negative means an inverted-yield-curve, which has preceded most US recessions.

Traders watch not just the level but the direction and the driver. Re-steepening from deep inversion, driven by the 2-year falling, has historically arrived close to the start of a downturn rather than safely before it.

Example: the 10-year is at 4.18% and the 2-year at 4.61%. 2s10s is -43 bp. Three months later the 2-year has fallen to 3.95% while the 10-year sits at 4.10%, so 2s10s is +15 bp, a 58 bp bull-steepener.

Related: three-month-ten-year, curve-steepener, curve-flattener, inverted-yield-curve, yield-curve

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