Core Insights - The article analyzes the historical trends of the 10-year Treasury yield since 1962, highlighting its relationship with key economic indicators such as the Fed Funds Rate (FFR), inflation, and the S&P 500 [1] - It discusses the contrasting monetary policies during periods of high inflation and economic recovery, particularly the drastic measures taken by the Federal Reserve in the early 1980s and the ultra-low interest rates following the 2008 financial crisis and the 2020 pandemic [1] Group 1: Historical Trends - The 10-year Treasury yield peaked at 15.68% in October 1981 and reached a historic low of 0.55% in August 2020, reflecting significant economic events [1] - The FFR was raised to a historic high of 20.06% in January 1981 to combat inflation, leading to a peak in the 10-year yield shortly thereafter [1] - Following the 2008 financial crisis, the FFR was lowered to approximately 0.04% in May 2020, resulting in a corresponding drop in the 10-year yield [1] Group 2: Recent Developments - From May 2022 to August 2023, the Fed raised the FFR to its highest level in over 20 years, which was mirrored by a rise in the 10-year yield [1] - The Fed held rates steady for over a year as inflation cooled, but shifted to three consecutive rate cuts in September 2024, while the 10-year yield increased despite declining FFR [1] - By the end of December 2025, the 10-year yield was at 4.24% with inflation at 2.68%, indicating persistent inflationary pressures [1] Group 3: Treasuries vs. Equities - Generally, Treasuries and equities move in opposite directions, but during inflationary periods, both can rise due to the impact of higher interest rates on corporate profits [1] - Adjusting the S&P 500 and 10-year yields for inflation reveals the severe impact of stagflation on real equity values from the mid-1960s to 1982 [1] - The Fed's historical extremes in the FFR demonstrate its ability to implement significant policy shifts in response to economic conditions, with varying success in stimulating the economy [1]

Core Viewpoint - The article examines the historical trends of the 10-year Treasury yield since 1962, highlighting its relationship with key economic indicators such as the Fed Funds Rate, inflation, and the S&P 500. Group 1: Historical Trends - The 10-year Treasury yield peaked at 15.68% in October 1981 during the Volcker era and reached a historic low of 0.55% in August 2020 amid pandemic-related economic uncertainty [2][3] - The Federal Funds Rate (FFR) was raised to a historic high of 20.06% in January 1981 to combat inflation, leading to the peak in the 10-year yield [3] - Following the 2008 financial crisis, the FFR was lowered to approximately 0.04% in May 2020, resulting in the 10-year yield dropping to 0.55% [4] Group 2: Recent Developments - From May 2022 to August 2023, the Fed raised the FFR to its highest level in over 20 years, causing the 10-year yield to rise in tandem [5] - In September 2024, the Fed implemented three consecutive rate cuts, while the 10-year yield moved in the opposite direction, indicating persistent inflation [6] - By the end of December 2025, the 10-year yield averaged 4.16%, with inflation at 2.74%, and the Fed cut the FFR by 25 basis points to a range of 3.50-3.75% [8] Group 3: Market Dynamics - The S&P 500 and the 10-year yield generally move in opposite directions, but during inflationary periods, both can rise simultaneously due to the impact of higher interest rates on corporate profits and bond prices [9]

Core Insights - The yield on the 10-year Treasury note was 4.14% as of December 5, 2025, with the 2-year note at 3.56% and the 30-year note at 4.79% [1] - The Federal Funds Rate (FFR) has a significant influence on Treasury yields, with the current FFR at 3.89% [2] Yield Trends - The 30-year Treasury yield reached a high of 5.35% and a low of 0.99%, currently at 4.79%, reflecting a basis point increase of 380 from its low [2] - The 10-year Treasury yield has fluctuated between a high of 5.26% and a low of 0.52%, currently at 4.14%, with a basis point increase of 362 from its low [2] Inverted Yield Curve - An inverted yield curve occurs when longer-term Treasury yields are lower than shorter-term yields, often serving as a leading indicator for recessions [5] - The 10-2 spread has been a reliable indicator, with negative spreads typically occurring before recessions, leading to an average of 48 weeks before a recession starts [8][11] Mortgage Rates - The Federal Funds Rate influences borrowing costs, including mortgage rates, which have recently declined despite the Fed holding rates steady, with the 30-year fixed mortgage rate at 6.19% [13] Treasury ETFs - 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) [14]

Core Insights - The article examines the historical trends of the 10-year Treasury yield since 1962, highlighting its relationship with key economic indicators such as the Fed Funds Rate (FFR), inflation, and the S&P 500 [1] Group 1: Historical Trends of the 10-Year Treasury Yield - The 10-year Treasury yield has fluctuated significantly, peaking at 15.68% in October 1981 and reaching a low of 0.55% in August 2020, with a recent average of 4.02% at the end of November 2025 [2][4] - The stagflation crisis of the late 1970s and early 1980s led to the FFR being raised to a historic high of 20.06% in January 1981, which contributed to the peak of the 10-year yield [3] - Following the 2008 financial crisis and the 2020 pandemic, the FFR was reduced to near-zero levels, resulting in the 10-year yield dropping to its historic low [4] Group 2: Recent Policy Responses and Economic Conditions - The Fed raised the FFR from May 2022 to August 2023 to combat rising inflation, which mirrored the increase in the 10-year yield [5] - After a period of steady rates, the Fed implemented three consecutive rate cuts in September 2024, while the 10-year yield increased despite the declining FFR [6] - In 2025, the Fed maintained steady rates before executing two rate cuts, with the 10-year yield trending downwards, although inflation remained above the Fed's 2% target [7][8] Group 3: Relationship Between Treasuries and Equities - Generally, Treasuries and equities move in opposite directions, but during inflationary periods, both can rise simultaneously due to the impact of higher interest rates on corporate profits and bond prices [9] - Adjusting the S&P 500 and 10-year yields for inflation reveals the severe impact of stagflation on real equity values from the mid-1960s to 1982 [11] - The Fed's historical extremes in the FFR demonstrate its ability to implement significant policy shifts in response to economic conditions, focusing on inflation control and economic growth [13]

Group 1: Treasury Yields and Economic Indicators - The 10-year note yield reached 4.11% and the 2-year note yield reached 3.60%, marking their highest levels in nearly three weeks and over a month respectively [1] - The inverted yield curve, where longer-term Treasury yields are lower than shorter-term yields, is considered a reliable leading indicator for recessions, with the 10-2 spread turning negative before recessions [3][4] - 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 lead time of 18.5 weeks [5][7] Group 2: Mortgage Rates and Federal Funds Rate - The Federal Funds Rate influences borrowing costs for banks, which in turn affects mortgage rates; however, recent trends show mortgage rates declining despite the Fed holding rates steady [8] - The latest Freddie Mac survey indicates the 30-year fixed mortgage rate at 6.17%, the lowest level in over a year [8] Group 3: Historical Context and False Positives - Historical analysis shows a false positive in 1998 where the 10-2 spread went negative without leading to a recession, contrasting with multiple instances before the 2009 recession [4][6] - The 10-3 month spread also indicates a similar pattern of false positives and negative spreads prior to recessions, with lead times ranging from 34 to 69 weeks [6]