Group 1: Treasury Yields Overview - The yield on the 10-year Treasury note ended at 4.14% on September 19, 2025, while the 2-year note was at 3.57% and the 30-year note at 4.75% [1] - A long-term view of the 10-year yield shows significant historical context, starting from 1965, highlighting the impact of events like the 1973 oil embargo [2] - The inverted yield curve, where longer-term yields are lower than shorter-term ones, is a reliable leading indicator for recessions, with the 10-2 spread turning negative before recessions [2][3] Group 2: Recession Indicators - The average lead time to a recession based on the first negative spread date is approximately 48 weeks, while using the last positive spread date yields an average of 18.5 weeks [4][6] - The 10-3 month spread also indicates a lead time to recessions ranging from 34 to 69 weeks, with similar patterns observed as in the 10-2 spread [5] - The most recent negative spread for the 10-2 occurred from July 5, 2022, to August 26, 2024, while the 10-3 month spread was negative from October 25, 2022, to December 12, 2024 [3][5] Group 3: Mortgage Rates and Federal Funds Rate - The Federal Funds Rate influences borrowing costs for banks, which typically leads to higher mortgage rates when the FFR increases; however, recent trends show mortgage rates declining despite steady FFR [7] - The latest Freddie Mac survey reported the 30-year fixed mortgage rate at 6.35%, the lowest since October 2024 [7] Group 4: Market Behavior and Federal Reserve Influence - Federal Reserve policy has significantly influenced market behavior, particularly in relation to Treasury yields and the S&P 500 [8] - ETFs associated with Treasuries include Vanguard 0-3 Month Treasury Bill ETF (VBIL), Vanguard Intermediate-Term Treasury ETF (VGIT), and Vanguard Long-Term Treasury ETF (VGLT) [9]

Here is a long-term view of the 10-year yield starting in 1965, well before the 1973 oil embargo that triggered the era of 'stagflation' (economic stagnation coupled with inflation) Inverted Yield Curve An inverted yield curve is when longer-term Treasury yields are lower than their shorter term counterparts. The next chart displays the latest 10-2 spread. Typically, the spread turns negative for a period before rising again prior to recessions, as illustrated in the four recessions shown on this chart. For ...