Group 1: Treasury Yields Overview - The yield on the 10-year Treasury note ended at 4.05% on October 10, 2025, while the 2-year note was at 3.53% and the 30-year note at 4.63% [1] - A long-term view of the 10-year yield shows significant historical context, starting from 1965, prior to the 1973 oil embargo [2] - The inverted yield curve, where longer-term yields are lower than shorter-term yields, 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] - 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 10-3 month occurred from October 25, 2022, to December 12, 2024, with fluctuations between positive and negative since February 26 [5][6] Group 3: Mortgage Rates and Federal Funds Rate - The Federal Funds Rate (FFR) influences borrowing costs for banks, which in turn affects mortgage rates; however, recent trends show mortgage rates declining despite the Fed holding rates steady [7] - The latest Freddie Mac survey indicates the 30-year fixed mortgage rate at 6.30% [7] Group 4: Market Behavior and Federal Reserve Influence - Federal Reserve policy has been a significant factor in market behavior, particularly regarding Treasury yields and their relationship with the S&P 500 [8]

Core Insights - The 10-year Treasury yield ended at 4.20% on September 26, 2025, with the 2-year note at 3.63% and the 30-year note at 4.77% [1] - The inverted yield curve, where longer-term yields are lower than shorter-term yields, is a reliable leading indicator for recessions, typically turning negative before recessions [2][3] - 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 [4][6] Treasury Yield Analysis - The 10-2 spread has shown a continuous negative trend from July 5, 2022, to August 26, 2024, with the last negative spread recorded on September 5, 2024 [3] - The 10-3 month spread also indicates a negative trend from October 25, 2022, to December 12, 2024, with fluctuations between positive and negative since February 26 [5] Mortgage Rate Impact - The Federal Funds Rate influences borrowing costs, and while typically a rising FFR leads to higher mortgage rates, recent trends show mortgage rates declining despite the Fed holding rates steady, with the latest 30-year fixed rate at 6.30% [7]