Compare yields across maturities to measure the slope and shape of the yield curve.
A normal curve slopes upward because investors demand compensation for locking money away. Inversion means the market expects rates to fall, which usually accompanies an expected slowdown. The ten-year minus two-year spread has preceded most modern recessions, which is why its sign attracts so much attention.
Yield Curve
Term spread = long-maturity yield − short-maturity yield
Term spread = long-maturity yield − short-maturity yield A normal curve slopes upward because investors demand compensation for locking money away. Inversion means the market expects rates to fall, which usually accompanies an expected slowdown.
The ten-year minus two-year spread has preceded most modern recessions, which is why its sign attracts so much attention.
This calculator takes 4 inputs: Three-month yield, Two-year yield, Ten-year yield, Thirty-year yield. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.